More retirement-related regulatory news for plan sponsors, including links to detailed information.
IRS issues private letter ruling on VEBA income used to pay benefits
The IRS released a private letter ruling on the treatment of income received by a voluntary employees’ beneficiary association (VEB) to pay plan benefits. The IRS ruled that a voluntary employees’ benefit association established by an earlier collective bargaining agreement between a union and a liquidating company to provide health insurance for retired union members is maintained pursuant to a collective bargaining agreement for the purposes of Section 419A(f)(5) of the tax code. Also, employer contributions and any income received by the VEBA and set aside to pay plan benefits is exempt function income under Section 512 and therefore won’t constitute unrelated business taxable income within the meaning of that section.
To read the entire private letter ruling, click here.
IRS posts information on multiemployer actuarial certification
The multiemployer defined benefit plan actuary must complete an annual actuarial certification of the plan’s funding status (IRC Section 432(b)(3)). This must be submitted to the IRS no later than 90 days after the beginning of the plan year. The determination of endangered and critical status is detailed in Section 432(b).
For more information, click here.