 Effect of Being Part of Larger Controlled Group
|
| What if a bank is part of a larger group by virtue of common ownership? |
| Banks that are part of a "controlled group" of banks (that is, are under common ownership as defined in Code Section 414(b), (c), or (m)) generally must treat the employees of all the members of the controlled group as employed by a single employer for purpose of determining whether the nondiscrimination requirements are met.7 |
Violation of Nondiscrimination Rules |
What happens to the VEBA if the nondiscrimination rules are violated? |
| If a Bank provides discriminatory benefits to its employees under the Trust, the Trust could lose its status as a VEBA and its tax exemption. This could mean that all of the Trust's income would be taxable and thus that the amount of benefits available under the Trust would be reduced. In order to ensure that this does not occur, it is essential that Banks comply with the nondiscrimination rules |
