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full funding for retirement benefits at the end of each employee’s
term of service.” (Emphasis supplied.)
Respondent acknowledges that sections 419 and 419A do not
impose an obligation on an employer to create a reserve to pay for
postretirement medical benefits; i.e., employers may pay and deduct
the medical claims as they become due on a pay-as-you-go basis.
Respondent further acknowledges that if an employer establishes a
reserve under section 419A(c)(2), sections 419 and 419A do not
impose a minimum annual contribution requirement or require an
employer to make contributions that are precisely level.
Respondent contends, however, that “funded” in section 419A(c)(2)
is synonymous with “amortized” and that if an employer does not
make a contribution in a given year, then the “contribution that
was not made would be funded over the remaining working lives of
employees in subsequent years”. Respondent asserts that the
language “funded over the working lives of the covered employees”
is essentially identical to the language of section
404(a)(1)(A)(ii), and, therefore, any accrued liability must be
amortized over the remaining lives of the active employees. We
disagree.
The language of section 404(a)(1)(A)(ii) is clearly different
from the language of 419A(c)(2). When applicable,19 section
19 The deduction for a contribution to a pension trust is
limited to the amount provided in sec. 404(a)(1)(A)(ii) when it
exceeds the minimum funding amount provided in sec. 412(a) and the
(continued...)
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