[Code of Federal Regulations]
[Title 26, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.419A-2T]

[Page 874]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.419A-2T  Qualified asset account limitation for collectively 
bargained funds. (Temporary)

    Q-1: What account limits apply to welfare benefit funds that are 
maintained pursuant to a collective bargaining agreement?
    A-1: Contributions to a welfare benefit fund maintained pursuant to 
one or more collective bargaining agreements and the reserves of such a 
fund generally are subject to the rules of sections 419, 419A, and 512. 
However, neither contributions to nor reserves of such a collectively 
bargained welfare benefit fund shall be treated as exceeding the 
otherwise applicable limits of section 419(b), 419A(b), or 512(a)(3)(E) 
until the earlier of: (i) The date on which the last of the collective 
bargaining agreements relating to the fund in effect on, or ratified on 
or before, the date of issuance of final regulations concerning such 
limits for collectively bargained welfare benefit funds terminates 
(determined without regard to any extension thereof agreed to after the 
date of issuance of such final regulations), or (ii) the date 3 years 
after the issuance of such final regulations.
    Q-2: What is a welfare benefit fund maintained pursuant to a 
collective bargaining agreement for purposes of Q&A-1?
    A-2: (1) For purposes of Q&A-1, a collectively bargained welfare 
benefit fund is a welfare benefit fund that is maintained pursuant to an 
agreement which the Secretary of Labor determines to be a collective 
bargaining agreement and which meets the requirements of the Secretary 
of the Treasury as set forth in paragraph 2 below.
    (2) Notwithstanding a determination by the Secretary of Labor that 
an agreement is a collective bargaining agreement, a welfare benefit 
fund is considered to be maintained pursuant to a collective bargaining 
agreement only if the benefits provided through the fund were the 
subject of arms-length negotiations between employee representatives and 
one or more employers, and if such agreement between employee 
representatives and one or more employers satisfies section 7701(a)(46) 
of the Code. Moreover, the circumstances surrounding a collective 
bargaining agreement must evidence good faith bargaining between adverse 
parties over the welfare benefits to be provided through the fund. 
Finally, a welfare benefit fund is not considered to be maintained 
pursuant to a collective bargaining agreement unless at least 50 percent 
of the employees eligible to receive benefits under the fund are covered 
by the collective bargaining agreement.
    (3) In the case of a collectively bargained welfare benefit fund, 
only the portion of the fund (as determined under allocation rules to be 
provided by the Commissioner) attributable to employees covered by a 
collective bargaining agreement, and from which benefits for such 
employees are provided, is considered to be maintained pursuant to a 
collective bargaining agreement.
    (4) Notwithstanding the preceding paragraphs and pending the 
issuance of regulations setting account limits for collectively 
bargained welfare benefit funds, a welfare benefit fund will not be 
treated as a collectively bargained welfare benefit fund for purposes of 
Q&A-1 if and when, after July 1, 1985, the number of employees who are 
not covered by a collective bargaining agreement and are eligible to 
receive benefits under the fund increases by reason of an amendment, 
merger, or other action of the employer or the fund. In addition, 
pending the issuance of such regulations, for purposes of applying the 
50 percent test of paragraph (2) to a welfare benefit fund that is not 
in existence on July 1, 1985, ``90 percent'' shall be substituted for 
``50 percent''.

[T.D. 8034, 50 FR 27428, July 3, 1985]

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