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GASB 45 Funding Vehicles


Guest JDeBacker
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Guest JDeBacker

I have a client subject to GASB 45 and for a few unique reasons, wants to dump the entire liability, now, into a fund (instead of funding through a VEBA with its annual contribution restrictions). I'm looking at establishing a trust under IRC 115, and wonder if anyone else is doing the same AND if anyone has submitted any request to the IRS for a private letter ruling? If so, I'd like to pick your brain (and am always happy to reciprocate!) Thanks!

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  • 4 weeks later...
Guest Rick Allen

Be careful with 115 trusts for use with GASB 45. Section 115 trusts are considered an integral part of the government. GASB 45 stipulates that assets must be held in a irrivocable trust seperate and apart from the govenrment. We have reviewed many Section 115 trust agreements and most will not satisfy GASB 45 provisions.

Even though we use the VEBA label in our d.b.a. name we have the ability to administer a 115 if it is structured properly. Please visit our website www.americasVEBA.com or email me at rallen@americasVEBA.com if you would like more information.

--RICK--

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Guest Rick Allen

One more thing...There are no funding limits for ERISA exempt employers establishing a VEBA for GASB 45 purposes. GASB 45 mitigation strategies can be accomplished with individual participant directed VEBA/HRA accounts and defined benefit obligations can be pre-funded using an aggregated VEBA...neither of which have funding limitations.

--RICK--

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