Conversion of VEBA to Defined Contribution Pension Plan.

[Guest Mike Pazzo]

Currently I have a 501©(9) VEBA that provides minimal benefits (i.e. death benefits, disaster benefits, life insurance, etc...). The Fund has over $600,000 in it, however the Trustees do not want to administer the Plan any longer. Individual participants have credit accounts with anywhere from $50 to $10,000. Is it possible to convert this plan to a Defined Contribution Pension Plan and then allow individual participants to roll there money over into another tax deferred arrangement? If so, what should I be concerned about?

[mbozek]

No- a VEBA cannot be merged with a qualified plan because it cannot provide deferred compensation. A VEBA can be merged with another veba or extra benefits can be provided to the participants upon termination.