The determination of whether a substantive commitment exists to provide pension benefits beyond the written terms of a given plan’s formula requires careful consideration. Although actions taken by an employer can demonstrate the existence of a substantive commitment, a history of retroactive plan amendments is not sufficient on its own. However, in postretirement benefit plans other than pensions, the substantive plan should be the basis for determining the obligation. This may consider an employer’s past practice or communication of intended changes, for example in the area of setting caps on cost-sharing levels.

In certain circumstances, a history of regular increases may indicate a present commitment to make future plan amendments. In such cases, a constructive obligation (to increase benefits) is the basis for determining the obligation.