Wednesday, July 2, 2014

Credit Unions Facing a "Perfect Storm"

Unlike banks, credit union executives are limited on how much they can contribute and receive from retirement plans.

CUNA Mutual Group's Bruce Bauer (senior executive benefits specialist) spoke about this controversial subject at ACUC saying credit unions are facing a "perfect storm" when it comes to recruiting, retaining and compensating executive talent. "Jobs are opening up, executive talent is being aggressively wooed away from credit unions." 

Think of these numbers:

  • Nearly 50% of U.S. employers are challenged to fill mission-critical positions.
  • 63% of organizations say other companies are trying to recruit their leadership.

What can be done to help keep your excellent executive at your credit union? Bauer has a four-word answer: Supplemental Executive Retirement Program (SERP). "Regulatory provisions allow credit unions to fund SERPs through formerly impermissible assets." 

When developing executive compensation plans, Bauer recommends three things for credit unions:
  1. Align compensation philosophy with their mission, organizational and financial goals.
  2. Encourage leadership continuity by defining a scope that addresses the CEO and key executives.
  3. Use peer compensation data to establish desired competitiveness levels.
What are your credit unions plans for keeping your executives?

Learn more about SERP here