Voluntary Employees Beneficiary Association (VEBA)
Definition of "Voluntary employees beneficiary association (VEBA)"
Tax-exempt entity as qualified under Section 501 (c)(9) of the Internal Revenue Code. The VEBA usually provides its members and their dependents and beneficiaries with paid life insurance, health insurance, and accident insurance. The VEBA can be established by any employer for employees even if they already have a retirement plan. Employers are permitted to make tax-deductible contributions to the VEBA that is usually established as a trust with the bank acting as a trustee. Earnings build within the trust on a tax-deferred basis. If the VEBA should terminate, all of the VEBA's assets are distributed to the active participants in the VEBA as of the date of termination. Distributions to a VEBA participant are not required to begin by age 70M, nor is a penalty charged if the distributions begin prior to age 5914. Survivor benefits are received on an income and estate tax-free basis. Assets of the VEBA are exempt from creditors' claims. The IRS code requires that the VEBA must have at least two participants (one of the participants can be a spouse); benefits must be based on annual compensation as well as age; and all full-time employees who are at least age 21 and have at least three years of full-time service must be allowed to participate. The employer can terminate the plan at any time.
Popular Insurance Terms
Accounting procedures that defer the full funding of a life insurance net level premium reserve to accommodate the policy acquisition cost in the early years of a policy. First-year policy ...
In health insurance, the number of days for which benefits are paid to the named insured and his or her dependents. For example, the number of days that benefits are calculated for a ...
Coverage on cargo in overseas ships for war-caused liability excluded under standard ocean marine insurance. Not covered is cargo awaiting shipment on a wharf, or on ships after 15 days of ...
Authority of states to tax the insurance companies they regulate. States levy income taxes, real and personal property taxes, and special levies, the most important of which is a premium ...
Bond guaranteeing that a contractor will pay fees owed for labor and materials necessary for construction of a project. If these fees are not paid, an owner who has paid the contractor ...
Federal agency that regulates the securities markets. The independent, five-member commission was created under the Securities Exchange Act of 1934 to enforce the securities act of 1933. ...
One-year futures contract (standardized agreement between two parties to buy or sell a commodity or financial instrument on an organized futures exchange such as the CBOT within some future ...
Property owned by two or more parties in such a way that at the death of one, the survivors retain complete ownership of the property. ...
Group insurance contract under which a periodic (usually monthly) disability income benefit is paid to the insured as long as he or she remains disabled. ...
Have a question or comment?
We're here to help.