Wells Fargo & Company (f.k.a. Norwest Corporation) and Subsidiaries - Page 45




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                  the medical benefit or life insurance (including death                                
                  benefit) payable to a retired employee during retirement                              
                  is fully funded upon retirement.  These amounts may be                                
                  accumulated no more rapidly than on a level basis over                                
                  the working life of the employee, with the employer of                                
                  each employee. * * *  The conferees intend that the                                   
                  Treasury Department prescribe rules requiring that the                                
                  funding of retiree benefits be based on reasonable and                                
                  consistently applied actuarial cost methods, which take                               
                  into account experience gains and losses, changes in                                  
                  assumptions, and other similar items, and be no more                                  
                  rapid than on a level basis over the remaining working                                
                  lifetimes of the current participants. * * * [H. Conf.                                
                  Rept. 98-861, at 1157 (1984), 1984-3 C.B. (Vol. 2) 1,                                 
                  411.]                                                                                 
                  The legislative history makes clear that the funding of the                           
            reserve can be completed no more rapidly than over the working life                         
            of the employee.  Therefore, we conclude that fully funding the                             
            reserve at or after retirement is permissible because, in that                              
            case, the assets are accumulated less rapidly than over the working                         
            life of the employee.                                                                       
                  To conclude this aspect of our deliberation, we hold that for                         
            purposes of section 419A(c)(2), the phrase “reserve funded over the                         
            working lives of the covered employees” means that assets necessary                         
            to satisfy the employer’s liability may be accumulated no more                              
            rapidly than over the working lives of the covered employees, such                          
            that the reserve with respect to an employee can be fully funded no                         
            earlier than upon retirement of the employee.                                               











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