Health Care Costs Are Part of Early Retirement Decision
Of the 30 employees at Autotruck Federal Credit Union, several of them have been working there at for least 25 years.
With 42 years of the service, Huston Reinle, president/CEO of the $84 million cooperative in Louisville, Ky., is among those who have been there the longest. Earlier this year, Reinle had a discussion with his board of directors about possibly coming up with a way to recognize those long-term staffers.
Employees at Autotruck who have at least 30 years of service, are 60 years old and have elected to retire at that age, are eligible to participate in BOLI, Reinle said. The credit union will provide health insurance for them for five years by paying for a single plan based on 2011’s costs plus a 7% inflation factor. Meaning, if an eligible employee were to retire today, Autotruck would reimburse them for what the credit union is paying now with an additional up to 7% for subsequent years.
Reinle said while it is normally impermissible for credit unions to invest in life insurance, if it is being used to offset income expenses, the NCUA has made an allowance for that exception. Essentially, a BOLI is used to help cover benefit costs, he noted. Sheeter said a BOLI must also meet other regulatory and accounting requirements that a credit union may not be aware of as they structure their plans.