SAN DIEGO -
The letter, which was mailed to Credit Union Journal anonymously but billed as coming from Mission FCU employees, makes several assertions regarding operations and the financial health of Mission Fed. Among the allegations: "We have losses of like $80 million on our subprime loan portfolios," "they took away our pension-GONE," "The Board took away our 2006 PIP, our bonus we count on, yet they, the Board, went to Europe for about 2 weeks, which is supposed to be top secret but we all know," "2007, they took away our PIP again and the Board is going to Hawaii in July."
The letter also alleged layoffs, staff reductions, and cutbacks in training. Ron Martin, CEO of Mission Fed, told the CUJ, "We consider 98% of what was brought up to be very old news. It was captured in a form of an idle collection of facts and sent to the media. If our board received an anonymous letter, it would not respond." According to Martin, the assertion Mission Fed had $80 million in losses in subprime lending is "absolutely incorrect." As for allegations concerning PIP, which is the CU's performance incentive program, Martin declared "taken away" is a "completely inappropriate term." He said a combination of items contribute to PIP, including earnings, loans, deposits and member satisfaction.
"That combination did not produce a match for results last year," he said. "We've had very generous payments in prior years, but it just didn't happen in 2006." There was a reduction in force, Martin acknowledged, but, "we did it for efficiency and effectiveness. Those cutbacks took place in the first quarter of 2006."
Martin said the allegations regarding trips by the board of directors misstated the context. He said these were not vacations, but "authorized, published conferences the board attends either related to WOCCU or NAFCU. The board went to no conferences last year, and the reference to Hawaii in July is the [upcoming] NAFCU conference."
Michelle Brega, Mission Fed's community relations manager, addressed the allegation the employees' pension was taken away. She said the credit union, until early 2006, offered employees both a defined benefit retirement plan as well as defined contribution retirement plan.
"We found that the pension plan was not perceived as beneficial to a large population of our employees, so a single defined contribution plan was instituted," she said. "Mission Fed also significantly increased its contributions to employees. Most importantly, to the point of [the] anonymous letter, all employee pension benefits accrued to the transition date were preserved."
The CUJ received a similar anonymous letter concerning Mission Fed in April 2006. At the time, Brega and a CU spokesman said most of the contentions were untrue or exaggerated.
