Trusted News for Credit Union Leaders
Credit Union Times
SEPTEMBER 25, 2019 | VOL. 30 | NO. 32 | 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;
COMPLIANCE
Checking In on Reg BI
As we head into fall, broker-deal
ers and advisors are receiving
warnings from regulatory players
on how far along their compliance should be with the Securi
ties and Exchange Commission’s
huge advice standards package –
namely Regulation Best Interest
and the customer relationship
summary, or Form CRS.
Meanwhile, the CFP Board
reacted to a serious drubbing
from the Wall Street Journal in
early August about the board’s
enforcement practices that led,
in part, to the board announcing
new enforcement changes.
Fred Reish, partner at Drink r
Biddle & Reath in Los Angeles,
Calif., said during the law firm’s
late July Inside the Beltway web-
cast that his “gut-level feeling”
is that BDs are “already behind
schedule,” despite the fact that
Reg BI isn’t enforced until July
30, 2020. “There’s so much ther
that i ’s going to be really hard to
comply.”
The final Reg BI requires BDs
to consider “cost of investments
investment strategies every
time a strategy is recommended
o a retail client,” Reish said. Bro-
ker-dealers now will be required
to go over their processes for
considering costs when it comes
to recommending a variable an-
nuity as well as the third-party
recommendation regarding mu-
tual funds, he explained. “What’s
the process? Then the training
and the policies and procedures”
have to be developed. Y15
Employee
Financial
Strain
Help out your SEG’s
employees. Y10
Attracting the
Best Talent
Navigate a
competitive job
market. Y8
FOCUSREPORT:
HIRING, RECRUITMENT
& BENEFITS
Attractive salaries and bonuses are key factors in landing and
retaining top talent at CUs. In this Focus Report, learn how
uncertainties in the U.S. economy have led CUs to approach
executive compensation differently in 2019. Y6
redit unions have
focused heavily on
wooing millennials
in recent years, but
with constant efforts to digitize
and mobilize everything, they
may be turning off baby boom-
ers. Here’s what two experts said
they wished credit unions would
remember about that 74-million-
strong band of Americans aged 55
to 73, plus six things credit unions
can do to keep some of that old-
school vibe.
Boomers Are the Ultimate
Influencers
“There’s a ton of focus on mil-
lennials to the point where it
does seem like some other gen-
erational cohorts are kind of
being ignored,” Laura Watson,
senior director of client strat-
egy at marketing and advertis-
ing firm Merkle, said. That can
be a fatal mistake,
she warned. Baby
boomers will soon
pass billions of
dollars down to
their children and
grandchildren
over the next sev-
eral years, giving
them considerable power over
the next generations’ financial
futures. In other words, millenni-
als may be at the epicenter of “in-
fluencer culture,” but baby
Attract (and Keep) Boomer Members
TINA OREM
torem@cutimes.com
Y16
MEMERSHIP CONNECTIONS
Watson
NCUA
Unveils
Aggressive
Agenda
DAVID BAUMANN
dbaumann@cutimes.com
rom bank purchases to
payday lending to Risk-Based Capital, NCUA
Hood, who returned for his
second stint on the NCUA board
earlier this year, has made it clear
he and the credit unions are
well-acquainted.
“I know many of you, and you
know me,” he told those attending
the recent NAFCU Congressional
Caucus. “Which means we can
save some time on introductions
and pleasantries.”
That may help explain his list of
issues he plans to tackle.
“The board agenda for the remainder of 2019 is ambitious, but
all of the issues are timely and in
need of being addressed,” former
NCUA Chairman Dennis Dollar
said.
“A lot of these issues they’ve
been working on for years,” Car-
rie Hunt, NAFCU’s EVP of govern-
ment affairs and general coun-
sel, said. “It takes time to work
through these issues.”
At its September meeting, a di-
vided NCUA board tack- Y17
REGULATIONS
