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CUNA seeks comment on NCUA golden parachute rules
WASHINGTON (7/15/11)--The Credit Union National Association (CUNA) has asked credit unions to comment on whether the list of Section 457 deferred compensation plans that are shielded from the National Credit Union Administration’s (NCUA) new executive compensation prohibitions should be expanded beyond 457(b) and 457(f) deferred compensation plans. The NCUA in May approved a final rule that prohibits golden parachute and indemnification payments. The golden parachute prohibitions would apply if the credit union in question is insolvent, in conservatorship, has a CAMEL 4 or 5 rating or is otherwise in "troubled condition." "Bona fide" deferred compensation plans, general institution-wide severance pay plans, and other assorted employee benefits will not be impacted by the prohibition. The NCUA rules came into effect on June 27, and only new contracts that were entered into after that date will be impacted. Current contracts held by credit union executives will not be affected, unless they are revised. The NCUA allows 457(f) plans to be offered to employees, provided the plans meet the “bona fide” criteria set forth by the agency. The Internal Revenue Service currently allows 457(b) plans to be amended to allow designated Roth IRA contributions and in-plan rollovers to designated Roth accounts. For CUNA’s full comment call, use the resource link.


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