Wells Fargo & Company (f.k.a. Norwest Corporation) and Subsidiaries - Page 42




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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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