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.