Minimizing Retirement Plan Liability for Credit Union CEOs

Guest post by Tom McLaughlin, Regional Director, Pentegra Retirement Services

As the CEO of a credit union, you engage in many different activities that raise the potential for legal liability. In most cases, these are risks borne by the credit union, i.e., any legal issues will be addressed by your legal counsel and/or covered by any one of several insurance policies.

But there is one area that is different, and may pose personal liability for you – your role as the fiduciary for your credit union’s retirement plan. If something goes wrong, you are personally responsible – that means all of your assets (savings, retirement, children’s college fund, vacation home, etc) are at risk. But it doesn’t have to be that way.

The essence of your credit union’s retirement plan, whether it is a 401(k) plan, profit sharing plan or defined benefit pension plan, is the plan trust—designed to ensure future benefits for employees participating in the plan and their beneficiaries. The Employee Retirement Income and Security Act (“ERISA”), established 1n 1974, created a standard of conduct that includes loyalty, due care and prudence.

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Six free market analysis tools for loan officers

Steve Richman is the national spokesperson for Genworth Mortgage Insurance and a sales trainer of loan officers. When he says sales trainer, he means it – Steve has taught over 50,000 lending executives.

Steve recently visited our offices at NAFCU to tape a series of educational webcasts specifically for credit unions. (And we really hope he speaks at our Strategic Growth Conference next year.) 🙂

The primary focus of Steve’s work is aimed at helping credit unions across the country increase their lending activity. In this first webcast of a four-part “Planning for a Purchase Market” series with NAFCU Services, he describes six free online market analysis tools and how best to use them.

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The case for credit unions providing their directors long-term care insurance

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.

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Online financial calculators: Not just another website widget

As Kevin O’Donnell described in a recent guest blog post on attracting and retaining ‘next generation’ members, the importance of having a dynamic website is key to satisfying the needs and wants of younger generation members and prospects. I would argue that this is true for all members, no matter their age.

Consumers age 10 to age 74 are all becoming more tech savvy. My grandma is on Facebook. My mother always has the latest updates on Droid apps. And my 10-year-old neighbor should hold the world record for texting speed. Even pets are getting in on the rise of technology – did you know there’s an iPad app to entertain your cat while you’re at work?!

It’s easy to see why – when you want to know how much home you can afford, do you immediately call your credit union and ask for a person in mortgages? No, you look online! (There’s a reason “Google” is now also a verb in Webster’s Dictionary). The Internet is the easiest way to find the quick answer you want. Your members do the same thing, whether they’re wondering how much to save for college, how long their retirement savings will last, or how long until they pay off that looming credit card bill. So, if your credit union doesn’t have the tools to answer these questions ONLINE, then you’re missing out on member leads.

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What do the Spanish Grandees and English Printers of the 1600s Have to Do With Credit Unions?

Dealing with disruptive change is an ongoing strategic challenge for credit union executives. What, for example, does the prospect of NFC transactions by cell phone and the potential entry of companies like Verizon and AT&T as gatekeepers in financial services mean to your business five years from now? Or ATM technology that allows a member to talk directly to a member service rep via videoconference to a branch-centric organization? Or peer-to-peer and micro-lending networks to your core business?

In the short run, a dominant paradigm for commerce can be defended against technological innovation. But in the long run, winners are those that embrace innovation and adapt their business models and their organizations. If it helps you feel any better, this is not the first time executives have struggled with these issues:

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