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Section 4.1 states that the employer must annually
contribute to the STEP plan such amounts as are calculated by the
plan actuary to provide for severance benefits of its covered
employees. The total amount to be contributed by all employers
is “based upon reasonable actuarial assumptions and methods
taking into account the experience of the Plan, as an undivided
and unweighted pool with no differentiation as to Covered
Employees (other than those differentiations described below) or
Participating Employers”. The amount to be contributed by each
employer is to be its allocable portion of the total for all
employers.10 Section 4.1 also states that the employer must
contribute the cost of 1-year term life insurance for any life
insurance benefit elected in the adoption agreement.
Section 5.2(a) states that a participating employer must pay
the STEP plan the annual cost of equivalent 1-year term insurance
if the employer elects a life insurance benefit for its
employees. Section 5.2(b) states that an employee may elect
additional life insurance beyond the amount elected by the
employer and that the employer must pay the STEP plan the annual
cost of the equivalent 1-year term insurance and the employee
must reimburse the employer for the additional cost. Section
5.2(c) states that the insurance benefit payable to the
10 In operation, the STEP plan neither employed a plan
actuary nor determined amounts to be contributed by the
employers.
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Last modified: March 27, 2008