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COLA payments were made in lump sum distributions in December in
the form of a “13th check”.
By the end of 1993, petitioner concluded that the COLA Fund
could no longer provide the anticipated 1-percent payment. In a
letter dated December 1993, which enclosed the 13th check,
eligible retirees and beneficiaries were informed that future
COLA checks would be based on a 2- rather than 3-percent rate.
As of 1994, the COLA Fund stopped paying COLAs. In September
1994, the COLA Fund’s trustee voted to end employer contributions
to the COLA Fund, effective July 1, 1995. In December 1994,
petitioner adopted an amended and restated plan that included
minor amendments to article 8, none of which are relevant herein.
In March 1995, petitioner proposed an amendment to article 8
which would eliminate the NPF COLAs paid to pre-1991 retirees.
Later in March 1995, the Plan filed a Form 5303, Application
for Determination for Collectively Bargained Plan, with
respondent’s Baltimore Key District Office (District Office).
The application was filed in response to a technical advice
memorandum dated November 9, 1994 (regarding provisions not at
issue in this case), as well as to comply with amendments to the
Code. The application contained the amended and restated plan
that petitioner adopted on December 22, 1994. It also contained
a copy of a proposed amendment to article 8 which would eliminate
NPF COLAs for pre-1991 retirees.
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