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574 (1995). A “reserve funded over the working lives of the
covered employees” “clearly evokes the gradual accumulation of
funds measured with an eye toward complete funding at the time of
retirement”. Gen. Signal Corp. v. Commissioner, 142 F.3d at 549
(citing Parker-Hannifin Corp. v. Commissioner, 139 F.3d 1090, 1094
(6th Cir. 1998)). We agree with respondent that the funding of the
reserve cannot begin until the reserve is created. However, we do
not agree with respondent that the reserve must be funded over the
aggregate remaining working lives of the active employees.
Respondent asserts that once the reserve is created it may be
funded over the aggregate working lives of the covered employees
and that the end of the working lives of the covered employees
occurs when the last covered employee is no longer employed by the
employer, because the employment of all covered employees has
terminated. Respondent acknowledges that, under that reading, the
reserve will not be fully funded upon retirement with respect to
any individual employee (except the last employee). The position
taken by respondent in this case is contrary to the position
successfully urged by the Commissioner in Gen. Signal Corp. In
Gen. Signal Corp. v. Commissioner, 142 F.3d at 549, the Court of
Appeals for the Second Circuit agreed with the Commissioner’s
interpretation that the phrase “funded over the working lives”
means that “the amount that is supposed to be added to the reserve
each year would, assuming the reserve remained intact, result in
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