Long time lurker here, but I feel the need to address this comment, since I believe it's inaccurate.

VEBA is not the only free-in/free-grow/free-withdraw retirement vehicle, particularly as it relates to health care expenses. Health savings accounts (HSA's) garner this triple benefit too, with some additional advantages to the VEBA structure:
1. Contributions, earnings, and withdrawals (if they're for qualified health expenses for yourself, your spouse, or your dependents) are all tax-free.
2. Once you reach retirement age, any balance in your HSA may continue to be withdrawn tax-free for health related expenses; or, you may choose to make withdrawals as taxable income in retirement and use it for whatever you want (no IRS penalties, just your then-current income tax).
3. The account is in your name, managed by you for investment growth, can be passed to whomever you choose, etc.

If a married couple starts contributing to an HSA this year, up to the current IRS limit of $7000 for a family, continues to do so for 15 years (assuming no increase in the $7k limit), and earns a modest 4% average return, they would have over $140k in the account by the end of those 15 years. Stretch it to 30 years and they'd have $400k; increase the projected growth rate and the number is obviously even higher.

My point is simply to provide another example illustrating that not everyone's situation and choices will follow the same path. If there is an IRS-compliant VEBA structure that affords pilots the ability to take their "excess" DC contributions as taxable income (while continuing to make their $1/hr mandatory VEBA contributions), then I wholeheartedly favor giving the group that option. If I'm missing something please feel free to enlighten me.