Terminating a MEWA

[Guest jhall]

I am part of a team preparing to terminate a long-established MEWA and am trying to locate any articles or other secondary materials or checklists that review the various issues and expected timeline with terminating a MEWA. So far I have not found anything particularly on point and would appreciate any suggestions other board members might have. Thanks.

[GBurns]

I always thought that termination procedures were included in the Trust documents.

[Guest jhinkle]

I think GBurns is correct about the trust documents setting out some of the basic procedures but there are other administrative aspects too I think including the notification process, how to schedule a termination timetable, planning for run-out claims, the distribution of excess benefits under 1.501©(9)-4, etc. Unfortunately, I suspect much of that varies from case to case.

[Ron Snyder]

jhall gave no indication that this was a VEBA. Regs. under 501©(9) don't apply to MEWAs.

You want a "checklist":

1. Review plan and trust document termination procedures.

2. Determine whether such provisions need to be amended.

3. Based on plan and trust provisions, determine proposed distributions.

4. Notify participants.

5. Make distibutions.

6. Provide W-2 forms with respect to such distributions.

7. File final 1041.

[Guest jhall]

Vebaguru,

Thanks very much for the checklist--very helpful.

Actually the trust involved is a VEBA. Are there additional issues we should add to the checklist to address the VEBA?

[GBurns]

Vebaguru

What does a VEBA have to do with the issue? A MEWA is usually a MET and it is optional to use a VEBA but not necessary. Even if there was no mention of there being a VEBA, there was the possibilty that 1 existed, but, even if there was no VEBA there most likely would be a MET, hence Trust documents.