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Guest SMBM VEBA

VEBA Audit Requirement-Retiree Contr Only

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Guest SMBM VEBA

I have a VEBA setup for retiree medical. The VEBA is self insured and has 300+ participants. The only thing going through the trust are retiree contributions and sponsor contributions, there are no active employees in the VEBA. I know the "letter of the law" would require an audit but a colleague of mine recently told me about some DOL guidance that suggests a VEBA with retiree medical contributions only would not require an audit. Is this true? Does anyone have authoritative guidance to that effect. Any help is much appreciated.

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I have been concentrated in this practice for over 30 years and have never heard of such a rule. There are some special rules where there are only employee payments, but if the former employer is contributing to the plan, I do not know of any way to get out of the audit for the facts that you have described. BUT, I am eager to learn if there is such an opportunity.

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In my experience, the EBSA can occasionally be helpful in getting answers to such questions. You should write a formal letter to the national office for guidance with respect to the issue. While formal guidance is not likely to be issued, you will hear back from one of their technical representatives who can give you his or her thinking on the issue.

I have not heard of such an exception either, but a waiver might be possible.

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