Wells Fargo & Company (f.k.a. Norwest Corporation) and Subsidiaries - Page 47




                                                - 47 -                                                  
                  Respondent asserts that a direct calculation of the accrued                           
            liability independent of the assets is not necessary.  Respondent                           
            contends that the actuary must compute on a level basis a reserve                           
            funded over the working lives of the covered employees.  Further,                           
            respondent posits that since the funding does not begin before the                          
            reserve is created, the reserve must be computed by allocating the                          
            cost in a level amount over the remaining lives of the employees.                           
            Respondent contends that (1) the actuarial methodology used must                            
            determine contributions at a “rate” that would be level if                                  
            actuarial assumptions were exactly realized, (2) the funds may only                         
            accumulate gradually, and (3) in order to accomplish the gradual                            
            funding, the actuarial method must provide for the ratable                                  
            accumulation of funds over the remaining working lives of the                               
            covered employees.  Respondent asserts that the following excerpt                           
            from the legislative history supports his position:  “The conferees                         
            intend * * * that the funding of retiree benefits * * * be no more                          
            rapid than on a level basis over the remaining working lifetimes of                         
            the current participants”.  H. Conf. Rept. 98-861, supra at 1157,                           
            1984-3 C.B. (Vol. 2) at 411.  Respondent contends that once an                              
            employer elects to fund a reserve for postretirement benefits under                         
            section 419A(c)(2), it must then select an actuarial cost method                            
            that satisfies this statutory requirement.  Respondent concludes                            
            that the aggregate cost method properly allocates the costs in a                            
            level amount over the remaining lives of the covered employees.  In                         






Page:  Previous  35  36  37  38  39  40  41  42  43  44  45  46  47  48  49  50  51  52  53  54  Next

Last modified: May 25, 2011