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 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.
