VEBA's for DC Consultants

[Guest Mbrockway]

Do affiliated service group rules apply to VEBA's, as it would pertain to 410(b) coverage rules under a DC plan?

I'm a DC plan consultant. I've got doctor who owns his own medical practice. He is also 1 of 30 owners for a emergeny physicians clinic, in which he provides services to. This is an affiliated service group.

The clinic maintains a 401(k) Safe Harbor plan. The doctor opted out of that plan. He'd like to establish a VEBA but I'm not sure if he can because of the affiliated service group rules.

Another one I have is a doctor w/4 partners within his corp. One of the new partners wants to set up his own S Corp or PA and enter into a VEBA. His CPA says that if he sets up his own corp he cannot participate in their 401(k) - which is contritictory to other cases I've worked on.

Any words of wisdom is appreciated. Sites are even better!

[Guest Mbrockway]

Additional info -

The VEBA's would be established for the doctor only.

[Ron Snyder]

Affiliated service group rules do not directly apply to VEBA trusts or associations. Howeve, the ASG rules DO apply to the benefits provided by the VEBA.

IRC Section 414(t).