Is a VEBA subject to rules against discrimination?
Yes. Section 505, which contains general nondiscrimination requirements, applies to VEBAs. Amount and type of benefits must be provided uniformly to all employees, based upon a fixed multiple of compensation, which eliminates discrimination in favor of highly compensated employees. Tax courts have established that it is the use of a consistent multiple of salary and not the cost of the benefit that satisfies the non discrimination requirements.
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- Is a VEBA subject to rules against discrimination?
