Millard D. and Marjorie C. Thomas - Page 5




                                        - 4 -                                         
                    (a) Amount.  The monthly amount of the Disability                 
               Pension shall be the amount of Regular Pension to which                
               the Participant would be entitled if he had attained                   
               his Normal Retirement Age at the time his Disability                   
               Pensions starts, based on -                                            
                    (i) the number of full and fractional years of                    
               Pension Credit accrued by him on the last day for which                
               the Employer was obligated to make contributions to the                
               Fund on behalf of such Participant, and                                
                    (ii) the Benefit Level in effect on the last day                  
               for which the Employer was obligated to make                           
               contributions to the Fund on behalf of such                            
               Participant.[4]                                                        
               A document entitled PIUMPF - CALCULATIONS, dated May 16,               
          1996, provided that Mr. Thomas was almost 52 years old when he              
          retired, and that he worked for Stone Container and its                     
          predecessors for 25.75 years.  The document shows an “Age                   
          Reduction %” of “60.0% on 52 Years 0 Months”.  According to the             
          document, Mr. Thomas’s “Benefit Level” was “$483 under Plan Type            
          ‘A’”.  The document estimates Mr. Thomas’s disability pension               
          benefits to total $498 per month.                                           




               4The PIUMPF Summary Plan Description, Section X, further               
          provides under the heading FINANCIAL INFORMATION that “The                  
          contributions to the Plan are made by the employers in accordance           
          with their collective bargaining agreements with the PACE                   
          International Union, AFL-CIO, and other unions, and are reflected           
          in the Fund’s Standard Form of Participation Agreements.”  The              
          record does not reflect that Mr. Thomas paid premiums for the               
          disability pension plan or that premiums paid by Stone Container            
          were includable in Mr. Thomas’s gross income.  Accordingly,                 
          Mr. Thomas’s disability pension benefits are not excludable from            
          gross income pursuant to sec. 72(b) or 104(a)(3).  See sec.                 
          72(f); sec. 1.72-15(c)(2), Income Tax Regs.                                 





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