Multiemployer - delinquency funds

[Guest Keith N]

Has anyone had any experience with Delinquency funds? I have a multi-employer client who is contemplating creating a fund in which the penalties collected on late contributions from contributing employers are deposited. These amounts will then be used to help pay for the DC allocations for employees of other employers who have defaulted on their payments.

My questions are:

1) Is this possible?

2) What kind of fund is the delinquency fund? (VEBA?)

3) How can I legally transfer $$ from one trust to another?

P.S. I also posted this question on the Multi-employer board, but this board tends to get a lot more action.

[Guest Keith N]

If you are interested in this topic, there is a lenghty discussion happening on the Multiemployer board.

Please post responses on that board.