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year, business improved, but the employer’s costs did not
decrease to the extent projected. The employer accordingly
offered an early retirement window for the fourth year as well.
Respondent ruled that the employer’s offering 4 consecutive years
of an “early retirement window” was made on account of specific
business conditions and was not designed to create a permanent
benefit. Accordingly, the early retirement window provisions
were not deemed to be part of the plan and could be discontinued
without disqualifying the plan.
Rev. Rul. 92-66, supra, was found to be convincing in
DeCarlo v. Rochester Carpenters Pension, Annuity, Welfare &
S.U.B. Funds, 823 F. Supp. 115 (W.D.N.Y. 1993). There, the
plaintiffs were retired union members. Their pension fund was
“overfunded” for 1988, 1989, 1991, and 1992, and they were given
an extra yearend payment (called, like the NPF COLAs, a “13th
check”). Id. at 118. Because the plan’s actuary warned that
issuing a third consecutive 13th check in 1990 would violate the
pattern of amendment provisions of section 1.411(d)-4, Income Tax
Regs., the plaintiffs were not given a 13th check for 1990. The
plaintiffs argued before the District Court that the plan’s
trustees had established a pattern of amendments that gave rise
to a nonforfeitable right to a 13th check. The court disagreed.
Relying on the provision of Rev. Rul. 92-66, supra, that made the
existence of a pattern of amendments dependent upon whether the
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