The Flaws of Target-Date Funds in Optimizing a Credit Union Executive’s Retirement Income

Both of these statements are accurate:  Almost 80% of credit union 401(k) plan participants have all or some of their retirement savings in a target-date fund (TDF), and they’re only gaining more popularity since they were first introduced in 1994.  Target-date funds are the wrong investment vehicle for most credit…

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…

Why Financial Planning is an Essential Executive Benefit for Credit Union Leaders

Traditional financial planning offers practical tools for rank-and-file employees; however, it simply doesn’t capture the full breadth of complex financial situations and compensation benefits a credit union executive has to manage in the C-suite. For example, beyond a standard 401(k), executives may also have a 457(b), 457(f), or split-dollar plan…

Personal Financial Planning: A Missing—Essential—Piece in the Credit Union Executive Benefits Package

The COVID-19 pandemic and subsequent Great Resignation have put significant pressure on employers to reevaluate their recruiting and retention efforts to seamlessly maintain operations and welcome a new generation of team members. While companies are primarily seeing this shift among their front-line positions, there has been a recent spike in…

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…

Split-Dollar Versus 457(f) Plans and What Credit Unions Should Evaluate

When building an executive benefits package that seeks to recruit and retain top talent, the question arises: with multiple options, which benefits should we include? Popular choices that uniquely benefit credit unions are the collateral assignment split-dollar (CASD) and 457(f) plans. Both are retention tools that provide retirement benefits to…

How Credit Union CEOs Can Make Bold Moves and Balance Personal Risk—At the Same Time

When is the appropriate time to undertake your boldest or most innovative projects? As a credit union CEO, you’ve likely considered how the risk of significant organizational changes may affect your future employment, and ultimately, long-term finances. These risks may arise from financial strain on your credit union or political…

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…

How Strategic CEO Succession Planning Can Position Internal Executives for Success

Planning to exit your organization as a credit union CEO ideally occurs years before your anticipated retirement date. Strategic credit union leaders understand the logistical and emotional process ahead of them. As a result, succession planning is an essential component to ensure the credit union’s success in the future, and…