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of the plan. Petitioner’s minutes of its meeting in October 1988
recite that its legal counsel reported that
recent Internal Revenue Service regulations which
provide that a pattern of repeated plan amendments
providing for similar benefits, in similar situations
paid to participants for substantially consecutive
limited periods of time will be considered by the
Internal Revenue Service as a permanent benefit and the
Internal Revenue Service would require that such
benefits be funded. [Counsel] * * * stated that the
regulations make a presumption that any such benefit
paid for three consecutive years will be considered a
permanent benefit.
In 1989, the employers’ contribution to the COLA Fund was
raised from 5 to 10 cents per hour worked. The COLA Fund’s
assets were again insufficient to pay the 3-percent COLA for 1989
and 1990. To make up for the shortfall, petitioner authorized ad
hoc payments from the NPF Fund of 2.3 percent and 2.1 percent for
the respective years.
In a session held on November 15 and 16, 1990, petitioner
agreed to amend the Plan to provide a 2-percent annual
cost-of-living benefit (the NPF COLA) as an integral part of the
Plan itself beginning in December 1991. A March 1991 newsletter
sent to plan participants stated in an article entitled “NOW!
COLA COVERAGE FOR ALL NPF RETIREES”:
The Trustees of the Sheet Metal National Pension Fund
have unanimously voted to extend COLA (Cost of Living
Allowance) protection to all qualified retired SMWIA
members and their surviving spouses who receive NPF
pensions.
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