The big picture of split-dollar agreements
Two strategies for strengthening executive compensation while staying flexible enough to accommodate your leadership continuity plan.
Split-dollar life insurance is becoming a more popular executive benefit for credit unions. When executing these agreements, it’s important to consider the big picture by answering these questions:
- How will this split-dollar agreement fit into our overall leadership succession plan? Specifically, will it allow us to recruit, reward, and/or retain other executives in the near future?
- Will we have room under the National Credit Union Association’s regulatory cap on any non-703 investments?
According to NCUA 5300 data, assets for the most common split-dollar arrangement used in credit unions—“loan regime” or “collateral assignment split-dollar” life insurance—increased 120% percent from year-end 2015 through 2018.
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