Voluntary Employees' Beneficiary Association (VEBA)
A Voluntary Employees' Beneficiary Association (VEBA) is a form of trust fund whose sole purpose must be to provide employee benefits. Among the types of benefits a VEBA may provide are accident insurance benefits, childcare costs, employee continuing education, the cost of legal services, life insurance benefits, severance pay, supplemental unemployment benefits, sick leave pay, training benefits, and vacation pay. A VEBA cannot, however, provide commuter benefits, miscellaneous fringe benefits, or retiree income. The plan may pay benefits to employees, their dependents, or their designated beneficiaries, or to disabled, laid-off, or retired former employees. Employer contributions to a VEBA are tax-deductible. Beneficiaries of a VEBA must have an employment-related common bond (such as a common employer), be covered by a collective bargaining agreement, or belong to a labor union.