Starting in September, hundreds of credit unions plan to sell individual retirement accounts with returns tied to the stock market's performance.

The product is the first initiative under a pilot program sponsored by the National Credit Union Administration. Organized by the Credit Union National Association, preliminary approval for 500 credit unions to participate was granted last week. More than 250 already have signed up, said Bill Hampel, CUNA's chief economist.

NCUA in June barred risky investments by credit unions starting Jan. 1, but they may experiment in buying and selling derivatives with NCUA's permission.

Under the CUNA pilot, credit unions could offer IRAs whose earnings would rise with increases in the Standard & Poor's 500 stock index over two- or four-year terms. Credit unions would buy options on the S&P index from Bankers Trust New York Corp. The options would pay a fraction of the S&P index's percentage increase that was negotiated with Bankers Trust.

- Olaf de Senerpont Domis and Dean Anason

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