Must Reads

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 CYBERSECURITY

Threats to Privacy Persist
The film industry has a rich his
ory of depicting and romanticiz-
ing cyber crime, from “The Girl
with the Dragon Tattoo” to “Sky-
fall.” While these films might not
be true to real life, cyber crime’s
frequent portrayal is a telling dis-
play of how crime is evolving as
our society becomes increasing-
ly reliant on technology.
However, cyber crime today is
a far more common threat than
anything portrayed in the mov-
ies. In the last 20 years, crime
has shifted away from the theft
of physical possessions, for ex
ample, to criminals carrying out
the majority of crime digitally.

This is especially true in the United States, where not only are cyber insurance claims dramatically increasing, but shifting away from data breaches – the main concern only a few years ago – and moving toward other types of cyber crime. In fact, theft of funds and ransomware now account for over 50% of CFC Underwriting’s cyber claims, eclips ing what is traditionally seen as the main cyber risk in the U.S. – privacy.

The New Threat Has Already Begun to Shed its Skin

Cyber crime, within a cyber surance context, generally refers to cyberat acks, which relate di rectly to the th ft or extortion of money from the victim, as opposed to theft of data or damage to systems. Of course, cyberat tacks involving he theft

Commercial Card Programs CUs should give them a second look. Y12

The Appeal of Venmo and Zelle Convenience is king. Y8

FOCUSREPORT: MOBILE BANKING

& PAYMENTS

It’s been three years since the EMV liability shift took place. So how much longer will credit and debit cards carry magnetic stripes? Learn five hurdles that will keep the magstripe alive for the foreseeable future in this Focus Report. Y6

GROWTH STRATEGIES

Small, Struggling CUs Forced to Merge

hough the economy
is booming, it did not
help credit unions that
had to merge because
of their financial challenges. In
July and August, the NCUA gave
the green light for 30 credit union
consolidations, and a third of
them, including a New York credit
union that managed a $69 mil-
lion taxi medallion loan portfolio,
Nonetheless, in the last two
months of the summer, the NCUA
approved strategic mergers or
consolidations for “expanded ser-
vices.” Those strategic mergers in-
cluded two sizeable credit unions
in Wisconsin and Minnesota, and
one large consolidation between
credit unions in California and
Alaska.

From January to August, 120
mergers were approved, which is
down from the 132 consolidations
approved from January to August
last year. It’s uncertain, however,
whether the pace of mergers will
continue to slow down, particu-
larly strategic mergers, as some
credit union executives have pre-
dicted, because of the controver-
sial NCUA regulations that offi-
cially began on Oct. 1.
The $183 million Bay Ridge
Federal Credit Union in Brook-
lyn, N.Y., chartered in 1934, was
the largest cooperative that
PETER STROZNIAK
pstrozniak@cutimes.com

Y16

PAC Donations Rise as Elections Loom

POLITICS

DAVID BAUMANN dbaumann@cutimes.com

ith less than a month remaining before Election Day and partisan control of both houses up for grabs, credit union trade groups are shifting their political spending into high gear.

CUNA’s political action committee, known as CULAC, is on pace to spend a record $7 million on the mid-term elections, according to Trey Hawkins, CUNA’s deputy chief advocacy officer for political action.

In 2016, CUNA and its political action committee spent almost $2.4 million on the election, according to the Center for Responsive Politics. During the last mid-term election in 2014, CUNA spent almost $2.5 million.