- 43 -
404(a)(1)(A)(ii) limits the deduction for a contribution to a
pension plan to “the amount necessary to provide with respect to
all of the employees under the trust the remaining unfunded cost of
their past and current service credits distributed as a level
amount * * * over the remaining future service of each such
employee”. The phrases “over the remaining future service of each
such employee” (the section 404(a)(1)(A)(ii) language) and “over
the working lives of the covered employees” (the section 419A(c)(2)
language) are not identical. We give heed to the fact that
Congress could have used identical language in both the pension and
VEBA provisions but chose not to do so.
Moreover, Congress in section 419A(e)(1) specifically made the
pension nondiscrimination rules of section 505(b) applicable to the
section 419A(c)(2) reserve. This is an indication that Congress
did not intend to automatically apply pension provisions to section
419A. Additionally, in section 419(c)(3), Congress provided for
the amortization of the adjusted basis of a child care facility
over 60 months. This is a further indication that Congress did not
intend to require amortization of the postretirement benefit of a
retired employee.
When Congress has intended to require costs to be spread over
the remaining working lives of active employees, it has done so
clearly. For example, the funding period for purposes of
19(...continued)
amount provided in sec. 404(a)(1)(A)(iii).
Page: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 NextLast modified: May 25, 2011