Bae Systems Funded Retiree Benefit Trust

“The veba ii funding the plan received an exemption letter from the internal revenue service dated january 5, 2004, stating that the trust is tax-exempt under the provisions of section 501(c)(9) of the code as a veba. Although the plan was amended after the receipt of the determination letter, the amendments did not relate to the tax qualification requirements of the code. The plan is required to operate in conformity with the code to maintain the tax-exempt status of the trust. The veba ii has since been amended, however the plan administrator believes the plan is being operated in compliance with the applicable requirements of the code and, therefore, believes the plan and related trust is tax-exempt. Under section 512 of the code, the investment earnings attributable to reserves for postretirement benefits are subject to unrelated business income tax (ubit). The plan was subject to tax during the year ended december 31, 2024, on unrelated business taxable income under section 511 of the code. The plan paid $822,000 of ubit during the year ended december 31, 2024.”

“Net depreciation in fair value of investments of $450,715 is reported on the audited financial statements as an expense item which includes unrealized losses on investments of $1,152,282, realized gains on investments of ($75,398) and reimbursed overbilled investment management fees of ($626,169). Net depreciation in fair value of investments of $450,715 is reported as revenue and/or revenue adjustment on the return.”

“Net decrease in 401(h) accounts of $850,885. Plus net depreciation in fair value of investments of $450,715 which is reported on the audited financial statements as an expense item which includes unrealized losses on investments of $1,152,282, realized gains on investments of ($75,398) and reimbursed overbilled investment management fees of ($626,169). Net depreciation in fair value of investments of $450,715 is reported as revenue and/or revenue adjustment on the return.”