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postretirement medical trust in 1991 and, on Ps’
consolidated return for 1991, claimed a deduction for the
contribution as an addition to a “qualified asset
account” pursuant to sec. 419A(b), I.R.C.
R determined that Ps’ method for computing the 1991
contribution for postretirement benefits for retirees was
improper and resulted in a contribution that exceeded the
account limit for a reserve under sec. 419A(c)(2), I.R.C.
R further determined deficiencies for years 1992-94 as a
result of the determined overfunding in 1991.
Held, with respect to an employee who is retired
when the reserve is created, the present value of that
employee’s projected benefit may be allocated to the year
the reserve is created. Accordingly, Ps’ contributions
to the postretirement medical trust for 1991 did not
cause the qualified asset account to exceed the account
limit under sec. 419A(b), I.R.C., with respect to the
reserve for postretirement medical benefits provided in
sec. 419A(c)(2), I.R.C.
Walter A. Pickhardt, Mark A. Hager, and Andrew T. Gardner,
for petitioners.
Alan M. Jacobson, Randall P. Andreozzi, Christa A. Gruber,
and James S. Stanis, for respondent.
Contents
FINDINGS OF FACT ....................... 4
A. Background ........................ 5
B. Norwest’s Welfare Benefit Plans ............. 6
C. Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 106 .......... 8
D. Norwest’s Contributions to the Postretirement Medical
Trust ......................... 11
1. Funding the Postretirement Medical Trust for 1991 . 11
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