Do you know where your credit union stands on executive compensation and benefits?

Every credit union is unique, and every CEO places a different emphasis on how they want their executive compensation and benefits package tailored, which makes an assessment of ‘market rates’ for executive benefits and compensation challenging. If you’re a board member you want to be both fair to your executives, provide a combination of compensation and benefits with the right mix of incentives to ensure alignment with your strategic goals, and also fulfill your fiduciary obligation to fellow credit union members.

As an executive, you want to make sure that your compensation and benefits are competitive and fit your personal needs, and are also flexible enough to adapt as those needs change throughout your career.

One great way to find out where your credit union stands relative to the market is with the NAFCU-Burns-Fazzi, Brock (BFB) Executive Compensation and Benefits Survey (free to survey participants).

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How Does Compensation Compare for Women Credit Union Executives?

Guest post written by Chris Burns-Fazzi, Principal, Burns-Fazzi, Brock

For many industries, gender equity has been a topic of discussion.  Have you ever wondered how men and women compare as credit union executives and the compensation they receive? We did too.

The NAFCU Annual Conference coming up at the end of July in Nashvillewill feature a Women’s Leadership Summit, with a number of timely topics, including an initial look at how men and women credit union executives compare in regards to compensation and their presence in top executive positions.

A bit of background – for five years now, Burns-Fazzi, Brock (the NAFCU Services Preferred Partner for Executive Compensation and Benefits) has underwritten the annual NAFCU-BFB Survey of Federal Credit Union Executive Benefits & Compensation. Conducted by an independent firm, Clark and Chase Research, there is no cost to participate, and the results are shared with participants as well as each year at the NAFCU Annual Conference. This year, we compared the survey results by gender.

We’ll go through the analysis in much greater detail at the conference, but some highlights —

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Some Good News about Deferred Compensation

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.

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Expected impact of 457(f) regulations on credit union plans

Guest post written by Jim Patterson, Attorney for Burns-Fazzi, Brock

After years of waiting, we are hearing rumblings that the proposed 457(f) regulations may be issued in 2012. The IRS “anticipates” changing the current 457(f) rules to recognize only cliff vesting and disallow elective deferrals. Plans using noncompete restrictions as the sole risks of forfeiture will no longer defer taxes. Fortunately, 457(b) plans would not be affected.

As nonqualified deferral plans for credit unions normally use cliff vesting to qualify for tax deferral under 457(f), and supplemental employer contributions rather than elective deferrals, the new rules should require few if any changes to credit union plans. (Nice for a change!)

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Understanding Credit Union Salary Surveys

Guest post by Jack E. Clark, PhD, Clark & Chase Research, Inc.

With executive compensation under scrutiny, salary surveys are increasingly important.   If done correctly, surveys provide reasonable estimates of what you could expect if you had access to this data for every credit union.   Surveys are far superior to decisions based on guesswork or anecdotal information picked up from some of your colleagues.  However, not all surveys are the same and the user needs to know what to look for.

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