Case Studies
Case Study 1
Asset size: $137 million
Challenges:
- Wanted to reward and retain executive team, but didn't have the budget.
- Implemented a 401K, but had no match and poor participation.
- Experienced trouble finding staff due to its rural location.
Plan: Invest $1.25 million a quarter for five years
Result: When the market was down over 25% in 2020, the credit union experienced zero losses and earned over 17% in the subsequent recovery. The credit union recouped all employee benefit costs by year four and implemented an executive retention package.
Case Study 2
Asset size: $347 million
Challenges:
- Wanted to build a retention package for their new CEO.
- Costly renewal rates on their health insurance premium had shifted more of the financial burden to employees.
Plan: Invest $5 million a year for seven years
Result: Four years into the program, the credit union is on track to pay 100% of health premiums for employees by year seven. They reported no market losses during the COVID period as well as in 2022, which ensured an ability to build for the future. Average ROI for the credit union’s peer group is under 2.7%; in comparison, ROI on the Total Benefit Prefunding Solution has been 5.71%.
White Papers
Enhancing Financial Stability and Covering Employee Benefit Costs
The financial landscape for credit unions is constantly evolving with increasing competition, regulatory pressures, and the on-going challenge of managing employee benefits costs.
Credit Union Benefit’s Total Benefit Prefunding Solution offers an innovative way for credit unions to address these challenges by turning employee benefits from a financial burden into a strategic asset.
This white paper aims to provide a comprehensive understanding of how our Total Benefit Prefunding Solution can help credit unions improve their financial stability, offer more sustainable employee benefits, and achieve long-term growth.
Executive Retirement Comparison Chart
| Program | Product | Fees | Yield after Fees | Liquidity | Maximum Investment | Who Benefits? |
|---|---|---|---|---|---|---|
| Executive Benefit Life Insurance Options | COLI | 1.5%-3% | 2.5%-3.5% | After surrender charges expire usually 10-20 years | 25% of Credit Union's net worth | Can benefit all employees, but limited to the 25% of net worth rule |
| Split-Dollar | 1.5%-3% | 3-4% for CU 1.5-2% for executive |
Credit Union-Usually no liquidity available until death of executive. Executive-Able to borrow money in retirement if the policy performs. |
25% of Credit Union's net worth | A few key executives | |
| Total Benefit Prefunding by Credit Union Benefit | Multiple Options | 0%* | 6-8%** | Up to 10% per year or after surrender charges expire 5-10 years | No maximum investment amount, rather the credit union just can't consistently earn more than the cost of their employee benefits | All employees and executives as it can cover 100% of employee benefit expenses |
* Unless Credit Union wants to add an additional rider for their benefit
** Based on worst 10yr performance
Dallas, TX
Copyright 2025.
All rights reserved.
Dallas, TX
Copyright 2025.
All rights reserved.