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benefits, that the usual form of payment would be in equal
monthly installments over 24 months from the date of the
employee’s termination, that the first installment would include
any payments delayed because of processing, and that severance
benefits could not exceed two times the employee’s last 12 months
of compensation before termination of employment. The STEP plan
did not limit the amount of life insurance benefits that could be
received by a covered employee and stated that the optional life
insurance benefit (if elected) would be received in addition to
the severance benefit if the covered employee died while employed
by the participating employer. The STEP plan stated that a
participating employer could choose to withdraw from the plan,
that a participating employer could constructively withdraw from
the plan by failing to make an annual contribution or by
violating a plan provision, and that upon withdrawal, any
optional life insurance benefit could be discontinued or
purchased from the plan by the employee or alternate insured at a
cost equal to the policy’s value (defined as the amount that
would be paid upon surrender of the coverage determined before
the application of surrender charges). The STEP plan stated that
the optional life insurance benefit also could be discontinued if
the covered employee terminated service with the employer, the
employer failed to make a contribution with respect to the
coverage, or the covered employee ceased to be a covered
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Last modified: March 27, 2008