VEBA permitted to use excess assets to pay premium for VEBA participants under employer's long-term disability plan
Article Abstract:
The IRS has approved an arrangement in which a voluntary employees' beneficiary association (VEBA) will use excess assets to purchase long-term disability insurance for participants that have contributed to the VEBA. The IRS found in PLR 9641034 that no private inurement exists under the plan, despite the fact that VEBA assets are being used to provide a benefit that the employer would have otherwise provided. The IRS appears to have been swayed by the fact that the disability coverage funded by the VEBA is only being given to contributing participants.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1996
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Governmental section 457 plan avoids section 457 contribution limitations by not establishing a trust to hold contributions
Article Abstract:
Amendments to IRC section 457 of the Small Business Job Protection Act of 1996 require trusts to hold funds of deferred compensation plans of government employers. The IRS in private letter ruling 9823014 denied eligibility to a city council's deferred compensation plan for not meeting the trust rules. The plan was intentionally structured to avoid eligibility status and contribution limits of eligible plans.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1998
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IRS rules that unused sick leave for collectively bargained employees contributed to VEBA can be used to provide VEBA benefit reimbursing participants for retiree health insurance premiums
Article Abstract:
The IRS in Letter Ruling 199902106 allowed unused sick pay to be contributed to a voluntary employees' beneficiary association (VEBA) as a means to reimburse retirees for health benefit premiums. The VEBA would not lose its IRC section 501(c)(9) tax-exempt status and the reimbursements were not to be included in the recipients' income.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1999
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