Category Archives : Collateral Assignment Split Dollar Plans

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Is the Design of Your Credit Union’s Split-Dollar Plan Sustainable?

Collateral assignment split-dollar plans are a powerful executive benefit with favorable tax treatment that can incentivize retention and offer credit union leaders a long-term income stream in retirement. However, while many credit unions have collateral assignment split-dollar plans as part of their executive benefits mix, it is no secret that…

Risk Factors for Credit Unions to Consider When Designing a Split-Dollar Plan

When deciding which executive benefits to provide to your leadership team, your board may have landed on the benefits afforded by choosing a collateral assignment split-dollar plan. This benefit type is a legal agreement between the credit union and executive that incorporates retirement distributions with life insurance coverage. While split-dollar…

Should Credit Unions Fund Split-Dollar Plans With Whole Life or Index Universal Life Insurance?

At ACT Advisors, the split-dollar plan is one of the most powerful executive compensation tools we encounter when delivering meaningful benefits to executives. The reasons include relatively reliable returns, lower risk, and their non-taxable nature in most cases. Before a credit union offers a split-dollar plan, however, it must evaluate…

Risks Credit Union Executives and Boards Should Consider With Collateral Assignment Split-Dollar Plans

Many credit union boards propose adding a collateral assignment split-dollar plan (CASD) as a desirable compensation benefit to help retain their top executives. At first glance, a CASD appears to perform similarly to a pension plan. However, this benefit is quite complex, and misunderstanding or making assumptions about a CASD…