A volunteer associate recipient association ( VEBA ) is a form of trust fund authorized under US federal tax law, whose primary purpose is to provide employee benefits. Among the types of benefits that VEBA can provide are the benefits of accident insurance, childcare costs, ongoing employee education, legal service fees, life insurance benefits, severance pay, additional unemployment benefits, sick leave payments, training benefits, and holiday payments. However, VEBA can not provide commuting benefits, other benefits, or pension income. The plan may provide benefits to employees, their dependents, or their designated beneficiaries, or to disability, dismissed, or retired employees.
The organization must also meet the following additional requirements:
- This should be a voluntary association of employees;
- Substantially all of its operations are for the purpose of providing benefits;
- The earnings may not benefit an individual, organization, or private shareholder other than through payment of benefits;
- This must be controlled by its members, in whole or in part by their guardians, or by an independent trustee; and
- Must be non-discriminatory in the payment of benefits (unless specified under collective bargaining agreements).
The employer's contribution to VEBA can be deducted from tax
The beneficiaries of the VEBA must have work-related employment (such as a general employer), covered by collective bargaining agreements, or union property. However, if some entrepreneurs share the same line of business and the same geographical area, they are considered to share a "shared bond" prescribed by law.
The main use of this concept was implemented in 2007 when the United Auto Workers agreed to form VEBAs for its workers in the Big Three automobile manufacturer, thus freeing companies from carrying out responsibilities for their health plans in their accounting books. The UAW Retiree Medical Benefits Trust, with assets of more than $ 45 billion as of June 2010, and $ 58.8 billion in March 2014, is the largest VEBA in the world.
Video Voluntary employees' beneficiary association
References
Maps Voluntary employees' beneficiary association
External links
- Selected Issues from the Voluntary Beneficiaries Association (VEBAs). Internal Revenue Service, US Treasury.
Source of the article : Wikipedia
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