Retention & Retirement

Supplemental Executive Retirement Plan (SERP) 457f Design & Implementation

Security in retirement is both an appealing enticement for senior executives and a powerful tool for credit unions looking to retain, recruit, and reward top talent. By establishing a Supplemental Executive Retirement Plan 457(f) (SERP) for selected executives, D. Hilton Associates can assist your organization in establishing a strong senior management team. This non-qualified deferred compensation agreement can provide retirement income to select credit union executives in return for the attainment of agreed-upon objectives, such as a specified number of years of service until retirement.


What are the advantages of using a 457(f) SERP?


  • Improves retention by rewarding executives retained for a specific number of years or until retirement.
  • Enables the organization to follow its succession plan in a timely manner by allowing its executives to retire at appropriate ages.
  • Selective and non-qualified plan, allowing the financial institution to choose and reward key executives without restrictions on contribution amounts.
  • The financial institution controls the plan, owns the plan policies and carries the cash value as an asset on its balance sheet.
  • Offer a choice of investment management styles within the same contract. The investor gets the benefit, cost savings and talent of institutional money management. This includes asset
    allocation, automatic rebalancing, and fund exchanges, without fees or taxes.
Andy Macias - Board Member 1st MidAmerica CU
Supplemental Executive Retirement Plan (SERP) 457f Design & Implementation

401(k) Plan Due Diligence

D. Hilton offers 401(k) Due Diligence as part of its Retention and Retirement Practice and can assist your credit union in determining the competitiveness of your 401(k) plan offering. Studies have shown that employee satisfaction is directly related to the perceived quality of an employee’s benefits package. Regular evaluation of all aspects of your credit union’s benefit offerings ensures continued employee engagement. D. Hilton’s 401(k) Due Diligence process includes:


  • A full assessment of the credit union’s current 401(k) including expenses, fiduciary standards and procedures, plan eligibility and enrollment, vesting schedules, compliance history, and current vendor service.
  • D. Hilton Associates will solicit new vendor providers, conduct vendor interviews, and complete a full assessment of each provider based on organization and history, client services, administration, regulatory services, loans, reporting, system capabilities, trustee services, expenses and more.

Employee Benefits Prefunding

As margins continue to shrink and operating expenses increase, credit unions are faced with the growing challenge of funding competitive employee benefits that ensure strong retention and employee satisfaction. Over the last ten years, employee benefit expenses have grown an average of 6% each year. Benefits prefunding allows credit unions to direct a portion of their excess liquidity into investments to cover certain benefit expenses. Benefits prefunding is permissible by the NCUA and can provide the needed financial support for your employee benefits.


D. Hilton can examine your credit union’s current benefit expenses and establish a benefits prefunding investment strategy that will support robust benefits packages for your credit union’s most important resource: the employees. D. Hilton Associate’s benefits prefunding process includes:


  • Assessment of current benefit expenses including 401(k) match expenses, employee life and health insurance, long- and short-term disability, defined benefit plan contributions, post-retiree health benefit funding, and 457(f) non-qualified deferred compensation arrangements.
  • Multiple benefit expense forecasts over several timeframes.
  • Creation of multiple funding scenarios to illustrate the options and costs for funding the benefit liability.
Benefits Prefunding

Biennial 457(f) SERP Research Survey

For more than ten years, D. Hilton Associates has provided the credit union industry with research and data on compensation and succession planning trends through its SERP Survey. The largest study of its kind in the credit union industry, the SERP Survey collects data from over 700 credit unions and has a response rate of over 50%. By examining what peer organizations are doing to ensure employee retention through 457(f) SERPs, credit unions can implement competitive compensation and retirement packages to retain their executive team.


  • 56% of CEOs at credit unions with more than $100 million in assets have a non-qualified deferred compensation plan in place.
  • Of those CEOs without a plan in place, 74% believe one will be implemented within two years.
  • 86% of credit union CEOs indicate their non-qualified deferred compensation plan was implemented as a retention incentive and 56% report it was for higher retirement benefits.