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INVESTMENTS

‘Pensionize’ 401(k)s and IRAs In a world of defined contributions, American workers have three challenges – inadequate savings, leakage (or loans/early withdrawals) tied to their retirement accounts and the need for retirement income. Plus, just half of all DC plans offer a way for investors to transform balances into periodic retirement income, with only one in five offering guaranteed lifetime payouts.

This situation prompted Steve Vernon of the Stanford Center on Longevity, Wade Pfau of The American College of Financial Services and researcher Joe Tomlinson to explore and devise solutions to “pensionize” retirement plans. Their work, first published last year and then updated this year, finds that only one-third of workers contact financial advisors, and most lack the necessary skills to convert savings into retirement income and typically have short planning horizons.

But research from the Stanford Center on Longevity (SCL) and Society of Actuaries (SOA) has found a “straightforward retirement strategy,” according to the three authors. “Choosing a specific solution that will help workers generate retirement income requires them to make informed tradeoffs between potentially competing goals,” they explained, such as “ maximizing lifetime income; providing access to savings (liquidity); planning for bequests; Y14

GROWTH STRATEGIES

Pot CU No Closer to Opening Date

PETER STROZNIAK pstrozniak@cutimes.com

Y16
fter it became the
nation’s first state-
chartered financial
institution to exclu-
sively serve the pot industry in

2014, Fourth Corner Credit Union attracted a lot of headlines from the mainstream and trade press, which excitedly anticipated its grand opening. But the much-celebrated, Denver, Colo.-based

4CCU is still not open for business, and most recently, it suffered yet another major setback that will keep the cannabis cooperative closed into the near future.

In late June, a federal judge dismissed the credit union’s lawsuit against the NCUA after the independent federal agency rejected 4CCU’s application for federal share deposit insurance. U.S. District Court Judge Raymond P.

Moore in Denver ruled 4CCU’s
insurance application was moot
because the credit union funda-
mentally changed its business
model after filing the original in-
surance application in September

2014. Judge Moore also admonished 4CCU for attempting to “paint gloss on an ugly situation,” adding, “... all of its efforts miss the mark.” His criticism seemed to be based on the credit union’s arguments that it did not fundamentally change its business model, contending that it will serve marijuana related businesses

Gen Z
Ready
for the
Spotlight
MARKETING

TINA OREM torem@cutimes.com

illennials have captivated the attention of many industries – including credit unions – that are interested in attracting young members and modernizing their brands. But with the oldest close to turning 40 and the youngest graduating from college or already in the workforce, interest is beginning to shift toward what some say is an even bigger prospect: Gen Z. Born between 1997 and 2012 (roughly), the youngest members of Gen Z are only about six years old; the oldest are around 21, according to consulting firm Accenture. Many of them are still small, but together they’re mighty: At 86 million strong, Gen Z is enormous (there are about 56 million millennials in the workforce, according to Pew Research), and its members may be the most digi-tally-inclined people the country has ever seen. They’ve never really experienced a world without smartphones, social media, video calls, texting, GPS or streamed entertainment.

Though many credit unions, already weary from the pursuit of millennials, may not have the energy or resources to go Y17

FOCUSREPORT:

RETAIL DELIVERY

& FRONTLINE TECHNOLOGY

Fintech continues to advance at a rapid pace, leaving credit unions and their technology partners racing to keep up. In this Focus Report, six experts discuss the biggest challenges CUs face when developing frontline technology that will meet members’ expectations. Y6