Wells Fargo & Company (f.k.a. Norwest Corporation) and Subsidiaries - Page 25




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                        c.    Mr. Daskais                                                               
                  Mr. Daskais, respondent’s expert, is an expert in actuarial                           
            science.  He is a fellow of the Society of Actuaries and was an                             
            enrolled actuary under ERISA from 1976 to 1995.                                             
                  Mr. Daskais opined that “actuarially determined on a level                            
            basis” means that the systematic year-to-year increments to the                             
            reserve are the same (or “level” in some sense) each year.                                  
            Examples of level increments that are appropriate for computing a                           
            reserve for postretirement medical benefits include (1) a uniform                           
            (or level) dollar amount each year or (2) a uniform (or level)                              
            dollar amount per active employee each year, so that the total                              
            dollar amount increases or decreases as the number of active                                
            employees increases or decreases.18                                                         
                  Mr. Daskais opined that in actuarial parlance a “reserve                              
            funded over the working lives of covered employees” is a “one-                              
            sentence description of the aggregate cost method.”  It means a                             
            reserve, determined on the basis of an actuarial cost method and                            
            actuarial assumptions, that will increase from year to year and                             
            will be exactly sufficient to provide the trust fund’s benefits at                          
            the end of the working lives of the covered employees.  Mr. Daskais                         


                  18    A third example is a uniform (or level) percent of the                          
            total payroll of active employees each year, so that the total                              
            dollar amount increases or decreases as the total payroll of active                         
            employees increases or decreases.  The experts agree that                                   
            allocating by percentages is inappropriate for postretirement                               
            medical benefits because postretirement benefits usually are not                            
            pay related.                                                                                




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Last modified: May 25, 2011