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VEBA Trust/Plan Document Consistency

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I am trying to determine whether or not I have a consistency issue with a VEBA Trust Agreement and a Master Plan Document. The Trust Agreement allows the trustees to pay for life, ad&d, medical, dental, vision, LTD coverage and benefits as they deem appropriate. The associated Master Plan Document is only for medical and dental coverage. The Plan's 5500 is including life, ad&d, medical, dental, and LTD coverage and benefits paid - some by the Trust and some by the employer.

I have a feeling that things aren't operating quite as they should be.

In my head, the Trust Agreement spells out what benefits COULD be offered. The Plan Document spells out what benefits ARE being offered. If the Plan Document doesn't include life, AD&D, LTD, then this activity should not be included on the Plan's Form 5500 or on the Trust's Form 990. In addition, the insurance related to these benefits should not be paid for out of the Plan's checking account.

My question is primarily this - can a VEBA Trust fund more than one benefit plan (as defined by a separate plan document) or does there have to be a one on one relationship between a VEBA Trust and a Plan? I know there are multiple employer arrangements that include multiple employer's plans, but can one VEBA Trust be used to fund multiple plans of ONE employer? IE fund the life plan AND fund the health plan?

I hope that makes sense.....

Julie

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In general, if both a plan and a trust document are created, the plan agreement spells out the eligibility, benefits, distribution, privacy rules, administration, claims proceedures, etc. applicable to the plan. The trust spells out the duties of the trustee with respect to the assets. Contributions may be addressed in either, neither or both documents. Otherwise, there shouldn't be much overlap between the two. Even definitions should be addressed only in the primary document and incorporated by reference into the other. (Usually the plan is primary.)

The direct answer to your question is: YES, a VEBA Trust can fund more than one benefit plan (whether in one or more plan documents). No one on one relationship between the VEBA Trust and the Plan need apply. However, this may not be dispositive of your problem because the trust should indicate which benefit plans (and plan documents) it is the trust for. The same trust can be used for both health and life insurance benefits, but only if that is what the plan and trust documents provide.

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