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Can donations from the public be used to fund a public sector labor un


Guest jnawdar

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Guest jnawdar

Our public sector labor union maintains its own dental, vision and life insurance benefits programs. Funds for these benefits are negotiated for during contract negotiations between the union and the municipality. However, costs for dental and vision services have outpaced the annual amount that the municipality provides. Short of cutting back on the levels of benefits provided, can funds that are DONATED to the union, FROM THE PUBLIC, also be used to pay for such benefits? Recently the union began a letter writing campaign to its citizens soliciting donations for worthy charitible causes that it supports. However there was no mention of using the donated monies for its welfare benefits plans also. Can such donated funds be used for such purposes legally/ethically? If this other purpose (to use the donations for the union's dental & vision expenses) was included in the solicitation letter, would it still be legal to do even though the benefits are being funded from the municipality through its contract?

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Well, there is no problem with having a plan funded in part by contributions of someone other than the employer and the employees. Rev. Rul. 63-46, 1963-1 CB 85; Revenue Ruling 68-223, 1968-1 CB 154; Rev. Rul. 65-178, 1965-2 CB 94. Thus, I wonder whether it would be possible either for the union itself make contributions to the fund (I'm assuming this is not a labor law problem in the case of a governmental plan, though I'm no expert on the labor side), or to have members of the public make direct contributions to the trust fund?

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Employee benefits legal resource site

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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