The 'Big Three' VEBAs and Other Stand-Alone Welfare Benefit Trusts: What Is and Is Not Novel about Them

Tax & Accounting Insights and Commentary, December 2009

6 Pages Posted: 15 Nov 2010

See all articles by Andrew Stumpff Morrison

Andrew Stumpff Morrison

University of Michigan Law School; University of Alabama Law School; Washington University in St. Louis - School of Law

Date Written: December 1, 2009

Abstract

Some conceptual confusion appears to surround the voluntary employees’ beneficiary associations, or VEBAs, recently established by “Big Three” automakers Ford, General Motors and Chrysler (as well as other companies) to meet these employers’ post-retirement health insurance obligations. In particular there seems a generally held apprehension that VEBAs themselves represent an inherently innovative funding strategy. The article emphasizes that what is innovative about the Big Three retiree benefit trusts is not the fact that they are VEBAs – a form of tax-exempt trust that has been routinely used to pre-fund benefit obligations for many decades – but rather that in these cases the trusts have assumed, from the employer, the legal liability for benefit obligations to plan participants.

Keywords: VEBA, Big Three, Retiree health, health insurance, erisa, employee benefits, tax

JEL Classification: J2, E62, H29, I11, J26

Suggested Citation

Morrison, Andrew Stumpff, The 'Big Three' VEBAs and Other Stand-Alone Welfare Benefit Trusts: What Is and Is Not Novel about Them (December 1, 2009). Tax & Accounting Insights and Commentary, December 2009 . Available at SSRN: https://ssrn.com/abstract=1709185

Andrew Stumpff Morrison (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States

University of Alabama Law School

101 Paul W. Bryant Dr.
Box 870382
Tuscaloosa, AL 35487
United States

Washington University in St. Louis - School of Law ( email )

Campus Box 1120
St. Louis, MO 63130
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
211
Abstract Views
1,376
rank
156,681
PlumX Metrics