Guest post written by Tom Telford, Executive Vice President, Burns-Fazzi, Brock
A pending IRS rule has some credit unions worried about the fate of their deferred compensation plans.
For some eight years now, the IRS has been considering the tax status of nonqualified deferred compensation plans offered by federal credit unions (FCUs). At issue is whether FCUs are entities of the federal government. In its analysis, the IRS concluded that FCUs are not because they are not federal instrumentalities. The IRS also had the option of finding that FCUs are eligible to offer these compensation plans because they are tax exempt organizations.
These plans have historically been an additional option for retirement planning above and beyond traditional 401(k) plans. Read more
Guest post by Tom Telford, Executive Vice President, Burns-Fazzi, Brock.
The term “volunteer” exemplifies commitment, impact and shaping a desired outcome through the offering of one’s own ability. For all board members committed to the credit union movement, this means thousands of hours of work to help shape their organizations. With the new regulations from NCUA regarding fiduciary duties, the responsibilities and expectations of credit union directors have multiplied.
The position of board member in for-profit sectors typically equates to monetary rewards for service. In the credit union industry, most forms of “compensation” are not allowed under NCUA guidelines.
NCUA regulation section 701.33 prohibits compensation to more than one board officer but allows a federal credit union to provide all directors with reasonable health, accident and other related types of personal insurance protection subject to numerous restrictions. Read more