Wells Fargo & Company (f.k.a. Norwest Corporation) and Subsidiaries - Page 12




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          employees.  Mercer determined that, because the retired employees           
          had no remaining working life, the present value of future benefits         
          for retired employees ($27,759,057) could be funded in 1991.                
          Mercer believed that Norwest’s resulting reserve for active and             
          retired employees ($30,689,717) would be within the section                 
          419A(c)(2) account limit.                                                   
               On the basis of the 1991 valuation report, Norwest contributed         
          $30,689,717 to the postretirement medical trust in 1991.  On the            
          consolidated return for 1991, Norwest claimed a deduction for the           
          contribution as an addition to a “qualified asset account” pursuant         
          to section 419A(b).                                                         
               2.   Funding the Postretirement Medical Trust for 1992-94              
               At the request of Norwest, Mercer prepared actuarial funding           
          valuation reports as of January 1 for each year 1992-94, relating           
          to the funding of the postretirement medical trust (the 1992-94             
          valuation reports).  In the 1992-94 valuation reports, Mercer               
          computed the end-of-year contributions to be $6,859,600,                    
          $11,308,043, and $12,247,933, respectively.  Mercer calculated the          
          contribution amount to be equal to a fraction.  The numerator of            
          the fraction was the present value of future benefits for active            
          employees and retirees, reduced by the sum of the value of (a) the          
          postretirement medical trust assets and (b) the section 401(h)              
          account assets.  The denominator of the fraction was the average            
          present value of future working lifetimes of the employees.  The            






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