419(e) Welfare Benefit Plans

DEFINITION of '419(e) Welfare Benefit Plans'

A type of employer-sponsored employee welfare benefit plan. 419(e) welfare benefit plans qualify under paragraph (e) of Section 419 of the Internal Revenue Code. They provide a range of benefits to employees, such as life, health, disability, long-term care and post-retirement medical. These plans can be either target contribution or target benefit in design, and are intended to provide additional financial stability for employees during their retirement years.

BREAKING DOWN '419(e) Welfare Benefit Plans'

The same company pays for all of the benefits of the plan, and does not pool benefits among employees of other companies. Irrevocable cash contributions are made on behalf of the employees on a periodic basis. The assets in these plans are usually held by an independent trustee, and are exempt from seizure by any creditors the company may have. The Internal Revenue Service (IRS) issued revised guidance in October 2007 that excluded some benefits for plans that were funded with permanent insurance. This plan can also keep contributions made for key employees separate from those of rank-and-file employees.

RELATED TERMS
  1. Other Post-Retirement Benefits

    Benefits, other than pension distributions, paid to employees ...
  2. Employer-Sponsored Plan

    A type of benefit plan that an employer offers for the benefit ...
  3. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  4. Unit Benefit Plan

    An employer-sponsored pension plan that provides retirement benefits ...
  5. Pension Plan

    A type of retirement plan, usually tax exempt, wherein an employer ...
  6. Welfare Capitalism

    Definition of welfare capitalism.
Related Articles
  1. Professionals

    Other Employee Benefits

    Other Employee Benefits
  2. Professionals

    Cafeteria Plans

    CFP Study Guide - Other Employee Benefits - Section 125 (Cafeteria) Plans
  3. Personal Finance

    Life Insurance Plans to Help Your Small Business Retain Employees

    How to use and design cash value life insurance plans as an incentive to help attract and retain key employees.
  4. Taxes

    401(k) And Qualified Plans: Introduction

    By Denise ApplebyDuring retirement years, income for retirees usually comes from three primary sources: Social Security benefits The regular savings account of the retiree Retirement-plan ...
  5. Taxes

    401(k) And Qualified Plans: Conclusion

    By Denise ApplebyA qualified plan is established by an employer to provide retirement benefits for employees and their beneficiaries. Qualified plans can come in a few different flavors. Let's ...
  6. Professionals

    Voluntary Employees' Beneficiary Association

    CFP Online Study Guide - Employee Benefits Planning - Voluntary employees beneficiary association - veba
  7. Professionals

    Qualified Employer-Sponsored Retirement Plans

    Qualified Employer-Sponsored Retirement Plans. In this section Defined Benefit vs. Defined Contribution Plan and 401(k), 403(b) and Profit-Sharing plans.
  8. Professionals

    Types of Employee-Sponsored Plans

    Types of Employee-Sponsored Plans
  9. Term

    What's a Qualified Retirement Plan?

    Employers establish qualified retirement plans to help their employees save money.
  10. Professionals

    Types and Provisions of Qualified Plans

    Types and Provisions of Qualified Plans
RELATED FAQS
  1. What are qualified retirement plan types?

    Understand the different types of qualified retirement plans and what they mean in terms of employee and employer contribution ... Read Answer >>
  2. How does a defined benefit pension plan differ from a defined contribution plan?

    Learn the differences between defined benefit plans and defined contribution plans when reviewing employer-sponsored qualified ... Read Answer >>
  3. What is the best retirement plan option for a physician with her own practice, employees ...

    It is very unlikely that you will find a qualified plan or an IRA-based plan that will allow the employer to exclude other ... Read Answer >>
  4. How can an entrepreneur save for retirement?

    Learn about the retirement savings plan options for entrepreneurs and small business owners, including administration and ... Read Answer >>
  5. What does a merger or acquisition mean for the target company's employees?

    Learn about the likely impacts of a mergers & acquisition deal on the target company's employees, their benefits and adjusting ... Read Answer >>
  6. What are some examples of common fringe benefits?

    Learn how offering fringe benefits can be a strategic recruitment and retention tool for employers and drastically increase ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center