Board Guide to Loan Regime Split Dollar: Guest Opinion
Is loan regime split dollar snake oil or liquid gold? How is a board to know? If it works, LRSD is a powerful tool for compensating key executives and preserving credit union assets. If it doesn’t work, the costs to the credit union and the participating executives are high.
The purported advantages over traditional nonqualified deferred compensation plans have led directors to consider LSRD. But boards can find LRSD due diligence daunting. However, like eating the proverbial elephant, the diligence due is more easily pursued in a series of small questions.