MADISON, Wis. – CUNA Mutual Group reported that its Total Benefits Pre-Funding program has reached $1 billion in assets under management in January, which it said is a “positive sign credit unions are taking advantage of previously impermissible investments to help fund the rising costs of employee benefits programs.”
CUNA Mutual noted that in 2003, NCUA adopted a rule formalizing its long-held view that, subject to a few restrictions, certain expected employee benefits obligations of federal credit unions may be pre-funded via otherwise impermissible investments, according to Jane Chesbro, CUNA Mutual group vice president of specialty distribution.
TBPF defrays the rising cost of benefits because it allows credit unions to offset employee benefits obligations by using potentially higher-yielding investments than would otherwise be considered “impermissible” by the NCUA. CUNA Mutual Group launched its TBPF program in 2008, and 226 credit unions have since implemented a program.
“It’s becoming more difficult for credit unions to maintain a competitive benefits package and remain an employer of choice,” Chesbro said. “TBPF offers credit unions an array of investment options that can help close the employee benefits gap.”
CUNA Mutual Group TBPF product offerings include a diverse array of investment solutions, including bank owned life insurance (BOLI), mutual funds, stocks, bonds, and institutionally managed portfolios that are customized to the specific needs of each credit union.
Assets under management have more than doubled in the last two years. Participating credit unions shared $40 million of incremental investment returns in 2014 alone, according to CUNA Mutual Group data. That extra income helps the bottom line and can be used to continue offering, or potentially add, high-quality employee benefits.