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language of section 419A(c)(2) is, in essence, a one-clause
definition of the aggregate cost method. Respondent posits that
section 419A requires that (1) a reserve for postretirement
benefits must be “funded”; i.e., contributions must be made for the
purpose of providing postretirement medical benefits, and (2) the
funding must be done on a “level” basis over the working lives of
the employees. Respondent contends that the funding cannot begin
before the reserve is created and, therefore, the funding must be
determined on a level basis over the remaining working lives of the
covered employees. Respondent concludes that, since retired
employees have no remaining working lives, the funding must be
determined on a level basis over the remaining working lives of the
active employees. Disagreeing with respondent, petitioners assert
that the term “funded” means “calculated”, not “contributed”, and
that the reserve (accrued liability) is calculated over the working
lives of the covered employees. Thus, petitioners conclude that
the reserve included in the account limit is an actuarially
determined accrued liability (i.e., a “reserve”) that is calculated
(i.e., “funded”) over the working lives of the covered employees.
(i) Reserve Funded Over the Working Lives of the
Covered Employees
We do not agree with petitioners that funded means calculated.
We have previously held that the “funded” reserve in section
419A(c)(2) refers to an accumulation of assets and the funding of
benefits. Natl. Presto Indus., Inc. v. Commissioner, 104 T.C. 559,
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