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written notice of termination to the trustee. When an employer
terminates its plan, assets remaining in that plan are
distributed to the employer’s covered employees in proportion to
their compensation.
Independent entities serve as trustees of the respective
trusts underlying the subject VEBA’s, and each trust’s terms are
the same except for the sponsor’s name. Under the trusts’ terms,
each participating employer agrees to make the contributions
required by the administrator to provide benefits under the plan,
and neither the participating employer nor another employer is
liable for a participating employer’s contributions. Any
benefits payable under one plan are paid solely from that plan’s
allocable share of the trust fund, and neither the participating
employer, administrator, nor trustee is liable for the inadequacy
of funds required to be paid. Each plan and corresponding trust
account benefit exclusively the related employer’s covered
employees and their beneficiaries, and no part of that trust
account may be used for, or diverted to, purposes other than the
exclusive benefit of those employees.
III. The Insurance Companies
The Inter-American Insurance Co. of Illinois (Inter-
American) specializes in providing to small, closely held
corporations products such as qualified pension and profit
sharing plans and group life insurance plans. When Inter-
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