benpat3

A secondary question is whether this transfer from one VEBA to another VEBA is a taxable event?

Can a 501©(9) transfer transfer assets to another 501©(9) trust? For instance, can a SUB Fund transfer assets to an HRA account or a H/W Plan? I have looked at GCM 39052 which seems to state that this can be done and does not violate the inurement rules. If my conclusion is incorrect or if you know of any other sources for this question, please let me know.

Have a situation where the employees will retire and the employer will pay them a severance pay that consists of a % of their unused accumulated sick leave. The employees have the option to take a lump-sum payment now or to defer the severance pay until the next year. There are a couple of other requirements, but assuming that the employee(s) satisfy those, and the employee(s) defers until the next year, must the amount of the severance pay be included in the employee's current year taxable income? I could easily be wrong, but I do not see this as a severance pay plan, as this severance pay is tied directly to the employee having accumulated sick leave and meeting a few other requirements. Also, are there any possible consequences to the employer if they do pay the severance pay in the next year? Thanks

What about the IRS clarifying that a Normal Retirement Age can not be conditioned on the completion of a stated number of years of service? If a Plan does have this provision, what does the Plan need to do? Plan provides that may retire after 28 years of service regardless of age. The IRS states that this does not satisfy the vesting and accrual rules of Section 411.

But the issue there had nothing to do with VEBAs, only with 419A asset account limits. While use of sub-trusts is acceptable, I don't believe it is required. Reasonable accounting should be adequate. That is the same position (that a sub-trust is not required and reasonable accounting will suffice) I am taking on it in regards to a VEBA and an HRA. I think the guidance that governs reimbursement under an HRA is seperate than reimbursement under a VEBA. I can not seem to find anything definitive that states that reimbursing medical expenses through a VEBA must be done with a seperate HRA sub-trust to be non-taxable to the individual. Thank you all for your responses and information.

Q2- it is a DB plan Q3 - yes Q4 - issue just came about when alternate payee died and participant demanded money. Q1 - Participant wants the Alternate payee's portion to revert back to the Participant. Plan provides 60 payments guaranteed, about 30 are remaining, and plan provides remaining goes to Alternate payee's beneficiary. No beneficiary card on file. QDRO states if AP predeceases participant the AP's portion of participants benefits shall become payable to participant. Participant looking to go to ct. to get QDRO modified/interpreted so that, at the very least the 30 remaining payment go to participant and at most the entire AP portion goes back to participant. I know there are a myriad of issues in this situation but the only issue of concern to me on this post is can a QDRO be modified/interpreted after the AP has died? What are the rules, if any, applicable to a post-death modification of a QDRO? ( I am finding authority on modifying a QDRO and possibly modifying after the participants death, but not finding anything for after the AP dies). Do the same rules apply to when the AP dies as when the participant dies?

Can a QDRO be modified/interpreted after the Alternate Payee has died? The Participant thinks that he is entitled to something, which in and of itself is questionable and a whole other issue, but the participant wants to take the QDRO to the domestic relations court and have them modify/interpret the QDRO to reflect what he says was the intent of the QDRO. If this does not make much sense, then I guess, generally, can a QDRO be modified/interpreted post-death of the alternate payee? Any ideas are welcomed. Thanks

Thanks for the replies, I guess my next questions is Why? What authority requires there be sub trusts? I look at the VEBA regs and other information and I do not see anything that specifically requires the sub trusts. As for the tax implications, I am looking at something from CCH that states under a VEBA "employees may be taxed on benefits at the time of distribution, to the extent that statutory exclusions do not apply." So based on this statement in regards to reimbursing medical expenses, the VEBA must utilize IRC 105(b) by setting up an HRA in order for medical expense reimbursments not to be included in gross income. Is it under this reasoning that requires the sub trusts? Is it the individual statutes, allowing the amounts to be excluded from gross income, that require the sub trusts? Thanks.

If a plan has a VEBA set up and along with providing other benefits reimburses medical expenses, does the Plan have to set up a seperate HRA, funded by the VEBA, that only reimburses medical expenses in order for these reimbursements to not be included in the participants gross income? A VEBA may provide life, sickness, accident or other similar benefits. It seems to me that a VEBA may reimburse medical expenses without having to have an HRA set up. I have read Rev. Rul. 2005-24 which states "[t]his ruling applies to any purported employer-provided medical reimbursement arrangement, regardless of how the arrangement is characterized..." Is this sentence in Rev. Rul. 2005-24 the reason why an HRA must be set up within a VEBA to reimburse medical expenses.

What if you have members from one union (say "A") working for an employer and the employer makes contributions to the 401k plan but made them to the wrong union plan (say "B"). There is no reciprocity agreement between the two unions A and B. It has been caught within the 6 months to return mistaken contributions to the employer but there have been gains on the contributions. How do we get contributions and the gains to the correct plan for the participants? Of can we?

Does anyone know anything about the abatement of withdrawal liability and reentering a plan? Employer withdrew from a plan in one city and later became signatory with another plan in another city. However, the employer will be doing work in the original city using union employees from both cities and so will have to contribute to the original plan. Can this amount to reentering the plan under the abatement requirements? Does the employer have to be signatory to the original plan to qualify for abatement? thanks