As credit unions look to retain executives, they may want to consider using a 457(f) plan as one potential tool to retain top-performing senior staff. A 457(f) plan is a great way to supplement income beyond salary for your executives, according to CUNA Mutual Group.
The plans are not subject to IRS limits on contributions, meaning a credit union can add an unlimited amount of funds to any executives’ compensation packages; a great way to motivate and reward top performers.
More than half of all credit unions with assets above $100 million offer 457(f) plans to their executives.
A 457(f) plan can also help credit unions recruit new talent, and it allows them to compete with banks and other organizations that are able to offer more in terms of compensation.
The plans can be customized to meet each credit union’s needs, including the funding solutions and payout options. It offers flexibility in distribution, though payouts cannot be made until vesting, providing more incentive for executives to stay.
There are a few considerations to make when choosing to offer a 457(f) plan. As a non-qualified plan, 457(f) funds are subject to taxation at vesting – when the risk of forfeiture lapses. 457(f) plans are also subject to creditor claims, meaning bankruptcy or liquidation.
To learn more about 457(f) plans, contact Scott Albraccio, Executive Benefits Sales Manager at CUNA Mutual Group, at email@example.com or (800) 356-2544, ext. 665.6542.