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CU System
60 of CU CEOs have supplemental retirement plans
MADISON, Wis. (8/28/08)--More CEOs at larger credit unions have supplemental executive retirement plans than ever before, but the numbers still lag behind the financial services industry as a whole, reports a new Credit Union National Association (CUNA) survey.
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According to CUNA’s 2008-2009 CEO Total Compensation Survey, 61% of CEOs at credit union with $100 million or more in assets had a supplemental executive retirement plan (SERP) in place in 2007, up from 55% in 2006. In comparison, 86% of executives in the financial services industry have a supplemental executive retirement plan, according to CUNA Mutual Group. . As tax-exempt organizations, credit unions can offer two types of SERPs: 457(b), or “deferred compensation,” and 457(f). For an executive, a 457(b) plan is similar to an employee's 401(k) with limited contributions--up to $12,000 in 2003. A 457(f) plan has more flexibility with no contribution limits, but also has substantial risk that deferred funds could be forfeited before they are vested (News Now Nov. 17, 2004). In the past, 457(b) plans were more commonly offered to credit union CEOs, but 457(f) plans have gained in popularity in the past two years. In 2007, credit unions were nearly as likely to offer 457(f) plans as they were to offer 457(b) plans--37% versus 39%, respectively. “SERP numbers have remained fairly flat at credit unions over the last several surveys, but these gains are coming at a good time,” said Kristina Grebener, director of research and advisory services in CUNA’s center for research and advice. “As the pool of leadership talent continues to shrink, driving loyalty through executive benefit plans will be critical for retention.” The report provides nationwide data for credit unions with $100 million or more in assets and details CEO compensation, including: base pay, bonuses and incentives, perks and benefits, executive retirement plans, and employment contracts and severance. The report also includes estimated values of the CEO total compensation package comprised of cash compensation (base salary plus variable pay), the cost of benefits and perquisites provided by the credit union, and the average annual value of car and car allowances received. For general peer comparisons, the survey data is presented by seven asset categories (from $100 million to $150 million in assets to $1 billion or more in assets), region, contract status, number of branch offices, number of full-time employees, loans outstanding, and number of members. A customized peer analysis is also available to compare a credit union to aggregated data from 10 or more peers.
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