 Use of VEBA Rules
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| Why does the Trust use the VEBA Rules? |
| Because of tax breaks. The Wisconsin Bankers Association Insurance Trust Fund is a "Voluntary Employees' Beneficiary Association" or "VEBA". Complying with the VEBA rules gives the Trust tax-exempt status, but also means that special nondiscrimination rules apply |
What are the special nondiscrimination rules that apply to VEBAs? |
| Among the VEBA rules are special nondiscrimination requirements that apply to Bank plans. Internal Revenue Code of 1986 ("Code") Section 505 rules re generally discussed below. The VEBA is subject to other ules that prevent prohibited inurement and also generally limit discriminatory designs. One aspect of the prohibited inurement rule, for example, generally restricts plans from paying disproportionate benefits to officers, shareholders, or highly compensated employees. This manual does not provide a complete discussion of these rules. Please consult with your legal counsel or other competent advisor for assistance with compliance. |
Impact on Banks |
| How do the VEBA nondiscrimination rules affect Banks? |
| Banks must take steps to ensure that their plans comply with the VEBA nondiscrimination rules. If a Bank's plan does not satisfy the nondiscrimination requirements for VEBAs, the Trust could lose it status as a VEBA, as explained in the Violation of Nondiscrimination Rules section. The nondiscrimination rules are very complex and this manual merely highlights some of the requirements. Please consul with your legal counsel or other competent advisor for asistance with compliance |
