I have never worked with a VEBA before, so excuse my ignorance. Does the VEBA trustee need to be an independent trustee or can it be someone at company that sponsors the VEBA. FYI: Employer is setting up a VEBA to provide Retiree health benefits. Any help would be appreciated. Thank you.

PBJ:
Why don't you read an excellent primer from the IRS?
Go to:
http://www.irs.gov/irm/part7/ch10s12.html.
Don Levit

Under IRC Section 501©(9), a VEBA must be either an "employees association" or it may be a trust with and INDEPENDENT trustee.

You stated that the VEBA must be an employee trust or have an independent trustee. What if the VEBA is sponsored by an employer? Who can be the trustee then? Currently, the employer is the Trustee of the VEBA and the VEBA was formed by a collective bargaining agreement. Should the VEBA have a trustee independent of the Labor organization and the company?

What if the VEBA is sponsored by an employer? Who can be the trustee then?
The VEBA can be an association of employees or have an independent trustee. This should be an entity that under state or federal law is endowed with trust powers.
Currently, the employer is the Trustee of the VEBA and the VEBA was formed by a collective bargaining agreement.
You omitted stating that the existence of the VEBA was negotiated in good faith negotiations between this employer and employee representatives. Assuming that to be the case [i.e., that the VEBA is not a sham 419A(f)(5)], since the employer is not independent, it could be the trustee only if a joint labor-management committee directed the trustee.
Should the VEBA have a trustee independent of the Labor organization and the company?
Either that or a joint board could serve as the trustee or administrator who directs a directed trustee.