SAN DIEGO -
John Moreno is director of client services and marketing for Members Capital Advisors, the registered investment advisor affiliate of CUNA Mutual Group., which manages more than $14 billion in assets.
According to Moreno, CUNA Mutual Group is one provider of pre-funding programs, whose investment earnings offset some costs of offering benefits.
"Benefits pre-funding is defined as assets earmarked for future benefit obligation," he said during an educational session at the CUNA HR/Training & Development Council's recent Summit here. "The money is invested in otherwise impermissible investments, and has the potential for return above short-term rates."
With healthcare costs escalating, the situation "is ugly," Moreno declared. He said CUs must compete with large banks for staff, and benefits packages offered to employees have become an "arms race."
The core elements to building a benefits pre-funding plan begin with creating an NCUA compliance record and obtaining a prescribed actuarial opinion benefits liability determination analysis. Next, Moreno said CUs must develop an investment strategy that fits their needs and risk tolerance.
"Investment considerations are used to support the investment strategy, and the investment options must be suitable for the credit union's investment strategy," he said. "CUNA Mutual Group wants to be a partner with credit unions on this. We have a long-term strategic alignment with the credit union industry.
"Get started, because the devil is in the details," he urged. "There are many intermediate steps."
