Certain negotiated plans
If contributions are paid by an employer—
(1)#
under a plan under which such contributions are held in trust for the purpose of paying (either from principal or income or both) for the benefit of employees and their families and dependents at least medical or hospital care, or pensions on retirement or death of employees; and
(2)#
such plan was established prior to January 1, 1954 , as a result of an agreement between employee representatives and the Government of the United States during a period of Government operation, under seizure powers, of a major part of the productive facilities of the industry in which such employer is engaged,
(A)#
such individual, if he is or was an employee within the meaning of section 401(c)(1), shall be treated (with respect to service covered by the plan) as being an employee other than an employee within the meaning of section 401(c)(1) and as being an employee of a participating employer under the plan,
(B)#
earnings derived from service covered by the plan shall be treated as not being earned income within the meaning of section 401(c)(2), and
(C)#
such individual shall be treated as an employee of a participating employer under the plan with respect to service before July 1, 1975 , covered by the plan.
Section 277 (relating to deductions incurred by certain membership organizations in transactions with members) does not apply to any trust described in this subsection. The first and third sentences of this subsection shall have no application with respect to amounts contributed to a trust on or after any date on which such trust is qualified for exemption from tax under section 501(a).