Trusted News for Credit Union Leaders
Credit Union Times
JULY 17, 2019 | VOL. 30 | NO. 23 | CUTIMES.COM
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;
FINANCIAL PLANNING
Engaging Retiring Boomers
An estimated 10,000 workers en
er retirement every day, a number that will rise as the tail end
of the baby boomer generation
reaches the age of 65 over the
next 10 years. The implications
for financial service providers
are immense, as boomers have
been a demographic sweet spot
that has generat d record demand for investment services
and advice – through good times
and bad – over several decades.
As they wrap up the most
economically productive phase
of their lives, late boomers are
shifting from a lifetime of asset accumulation to a process
of decumulation. Therefore,
it’s a good time to determine if
current strategies – which have
brought financial advisors and
weal managers the success
they enjoy today – will c ntinue
o be relevant in the m nths and
years to come.
State of Boomer Retirement
Uncertain
To be sure, boomers – especially
those entering retirement now
and in the near future – are in
need of solid counseling. In the
recent 2019 Retirement Plan
Participation Satisfaction Study
from J.D. Power, we surveyed
boomers who participate in defined contribution plans and
found some concerning trends:
• Fewer than one in four respondents in this demographic
segment reported being “very
confident” in their re- Y16
FOCUSREPORT:
REGULATION &
COMPLIANCE
The Trump Administration has pumped
the brakes on regulation over the financial
services industry. Hear from experts on
what that means for CUs – and which
regulatory issues currently weigh on CU
executives – in this Focus Report. Y6
Promoting
Financial
Wellness
Learn three program
strategies that
work. Y12
BEC Schemes
Avoid these
potentially costly
scams. Y9
sk someone to list
the talents associ-
ated with execu-
tive leadership in
the credit union industry, and
you might hear about opera-
tional proficiency, analytical
competency, tech knowledge
or results-driven abilities. But
like the organizations they help
run, credit union executives are
complex creatures. There’s of-
ten more to them than meets the
eye – hidden talents few people
might expect.
That’s why back in March we
took to the CU Times Facebook
page with a plea to industry ex-
ecutives to reveal those hidden
talents. What we received were
stories and photos that were
surprising, amusing, humbling
and heartening – reminders that
at their core, credit unions are
built by people, run by people
and exist for people. The sub-
missions enabled us to see credit
union professionals in a way we
had never seen them before, and
revealed hidden talents ranging
from musical theater to home
remodeling.
Here’s a look at seven leaders
who are doing the unexpected
and, along the way, highlight-
ing some of the rich variety that
makes the industry and credit
union community so special.
CU Leaders Unveil Hidden Talents
TINA OREM
torem@cutimes.com
Y14
PROFILES
Death of a
CUSO
PETER STROZNIAK
pstrozniak@cutimes.com
he $1.5 trillion student loan crisis has
claimed a new victim –
After years of legal proceedings and a recent surprise settlement with the CFPB, the CUSO
will close its business for good
after agreeing in June to cancel
and stop collecting $168 million
in loan debt for thousands of students. These were high-interest,
high-fee loans that students could
not only not afford, but that they
didn’t even want, didn’t understand and didn’t even know they
had, according to the CFPB.
In a separate settlement agreement announced in May involving the Chapter 7 bankruptcy of
ITT Technical Institute, Student
CU Connect also agreed to pay
$7.5 million out of a $8.8 million
fund from which the balance, $1.3
million, will go to the CUSO.
While the CFPB settlement
means the CUSO will pay no financial penalties, not even restitution for student victims, the
bankruptcy case settlement freed
Student CU Connect of potentially
paying millions of dollars that a
bankruptcy trustee lawyer originally sought in an adversary court
proceeding. Now this settlement,
titled as a “compromise,” will allow the CUSO to possibly collect
an undetermined amount Y17
ENFORCEMENT
