FCUs Can Recover Employee Life InsuranceCosts

Register now

ALEXANDRIA, Va. - (12/02/04) -- A federal credit union may recovercosts incurred when investing in a life insurance product to fundan employee benefit, NCUA said in a new legal opinion letter. So ifthe credit union were to promise an employee a $500,000 retirementbenefit that costs the credit union $250,000, the credit union mayplan on a $750,000 payout when the retirement benefit becomes due.The FCU may also recover certain opportunity costs, such as cost offunds to finance the employee benefit, but must adopt an"appropriate, conservative" approach to doing so, NCUAsaid.

For reprint and licensing requests for this article, click here.