Credit unions looking for growth in 2012 need to do a far better job on succession planning and retirement compensation given the impact of benefits shortfall in the economy, according to a CUNA Mutual Group specialist speaking to Montana credit union leaders.
Jay Petty, CMG's executive benefit specialist, in remarks before the annual meeting recently of the Montana Credit Union Network in Billings, cautioned credit unions they need to “maintain a compensation package that is equal to or better than the competition” which might include supplemental executive retirement plans.
“Defined benefit pensions are a thing of the past and a 401(k) alone is not enough,” said Petty stressing it is hard to get a meaningful pay replacement at retirement from just a 401(k).
Petty said if a credit union has skilled, trusted managers, “you can put in a plan that rewards them and makes it very difficult for them to leave your credit union.”
Credit unions may have a CEO succession plan in place, but unless that plan has an executive development component along with financial incentives to retain top talent, credit unions risk losing potential CEO replacements to other organizations, including credit unions, he said.
Credit unions need to take a hard look at their succession plan determining if they have a real one in place or simply a “Break in Case of Emergency Plan,” Petty said.
In essence, credit unions “need to avoid being caught in a fire drill,” he warned.
Overall, said Petty, it is vital that credit unions reward senior staffers for their long tenure considering these are the ones that generated success. And so a dignified retirement package has to be extended to recognize those years of service, he concluded.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
