4105 / What is the penalty for providing certain disqualified benefits through a welfare benefit fund?

An employer will be subject to a tax equal to 100 percent of:

(1)   any postretirement medical or life insurance benefit including any other death benefit provided to a key employee other than from a separate account, if a separate account was required ( Q 4103);

(2)   any postretirement medical or life insurance benefit including any other death benefit provided with respect to an individual in whose favor discrimination is prohibited unless the plan is nondiscriminatory ( Q 4104, Q 4113) with respect to this benefit, or

(3)   any portion of the fund reverting to the benefit of the employer that is attributable to contributions that were deductible in the current or any prior year.¹