What is a Voluntary Employees Beneficiary Association (VEBA)?
A VEBA is a multiple employer welfare benefit plan described in 1.162-10 of the Income Tax Regulations, and a tax-exempt organization formed under sections 419A(f)(6) and 501(c)(9) of the Internal Revenue Code. It’s purpose is to provide benefits to employees and their beneficiaries. As such, all contributions to it are deductible and there is no limit to the amount of the deduction the employer can take for contributions to the plan. The earnings grow tax free and funds contributed grow tax deferred and enjoy almost complete asset protection under the Employee Retirement Income Security Act (ERISA). VEBAs have been in existence since 1928.
