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Guest Mike Pazzo

Conversion of VEBA to Defined Contribution Pension Plan

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Guest Mike Pazzo

Currently I have a 501©(9) VEBA that provides minimal benefits (i.e. death benefits, disaster benefits, life insurance, etc...). The Fund has over $600,000 in it, however the Trustees do not want to administer the Plan any longer. Individual participants have credit accounts with anywhere from $50 to $10,000. Is it possible to convert this plan to a Defined Contribution Pension Plan and then allow individual participants to roll there money over into another tax deferred arrangement? If so, what should I be concerned about?

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As mentioned in the other thread where you also posted this, a VEBA cannot revert to the employer and connot be used to provide deferred compensation benefits.

If, as you say, "the Trustees do not want to administer the Plan any longer", you should consider rolling the assets to a service provider who wishes to provide those services. My firm charges $1,000/year for administration of a VEBA plan and trust. There are several other firms out there that can provide similar services for similar fees.

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