We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
Understanding Multiple Employer Trust: A Comprehensive Legal Overview
Definition & Meaning
A Multiple Employer Trust (MET) is a legal arrangement where ten or more employers come together to form a trust. This trust is designed to provide certain employee benefits, primarily life insurance, while minimizing tax implications. Established by Congress in 1984 under Section 419(A) of the Internal Revenue Code, METs allow participating employers to pool resources and share the costs of benefits, enabling small businesses to offer competitive employee perks.
Table of content
Legal Use & context
METs are primarily used in the context of employee benefits and tax planning. They are relevant to small businesses seeking to provide life insurance and other benefits without incurring heavy tax burdens. Legal professionals may assist businesses in forming METs to ensure compliance with tax laws and regulations. Users can manage the formation of a MET using legal templates and forms from US Legal Forms, which are drafted by experienced attorneys.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A group of small manufacturing companies forms a MET to provide life insurance for their key employees. By pooling their resources, they can offer better coverage at lower costs.
Example 2: A MET allows a coalition of small retail businesses to provide life insurance benefits that help them compete with larger retailers for skilled workers. (hypothetical example)
Relevant laws & statutes
The primary statute governing METs is Section 419(A) of the Internal Revenue Code, which outlines the tax treatment of contributions and benefits. Additionally, IRS Notice 95-34 provides specific guidelines on how METs should be structured to ensure tax deductibility.
Comparison with related terms
Term
Definition
Key Differences
Multiple Employer Trust (MET)
A trust formed by multiple employers to provide employee benefits.
Focuses primarily on life insurance benefits and tax implications.
Multiple Employer Welfare Arrangement (MEWA)
A plan established by two or more employers to provide welfare benefits.
MEWAs are subject to ERISA regulations, while METs are not.
Common misunderstandings
What to do if this term applies to you
If you are a small business owner interested in forming a MET, consider consulting a legal professional to ensure compliance with tax laws. You can also explore US Legal Forms for templates and resources that can guide you through the process of establishing a MET.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.