Vacation Funds are welfare benefit plans that were established to provide participants with vacation benefits. Contributions into Vacation Funds normally represent participant contributions but could include employer contributions. Contributions are usually calculated based on a set hourly rate. However, they can also be based on a percentage of the participants' wages.
Benefits are paid on a predetermined schedule, such as quarterly or annually. The participants usually receive an amount equal to the contributions paid on their behalf during the period. The benefit amount is normally not contingent upon the participant actually taking a vacation.
©2010 Schultheis & Panettieri LLP, All Rights reserved.
