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ATHENS, Ohio – Despite an unexpected setback that’s taken about a year to recover from, Ohio University Credit Union CUSO is on its way to providing members of the credit union with 403b retirement plan benefits for the university’s employees. The CUSO has already cleared the first required step to be authorized. In March, the University of Ohio approved the CUSO’s “hold harmless agreement” which essentially laid out who would be responsible for certain activities such as the CUSO having the responsibility to withhold and remit payments. The second step, which is required by the Ohio Revised Code, is for the CUSO to obtain the endorsement of 1% of the eligible employees of the university. The school has more than 3,500 eligible employees, so the CUSO has to get endorsements from 36 of them. Ohio State University already has about 10 providers of 403b retirement plans for its employees, but Cory Corrigan, vice president of the CUSO’s financial services said “80% of them aren’t located in Athens, so university employees don’t have a working relationship with a local advisor.” According to Corrigan, university employees already participating in a 403b plan through these providers have been putting about $700,000 a month into their 403b plan. “That showed us the possibilities for us to offer this service. It’s a great way for us to form a relationship with the employees and to annuitize our business through members’ on-going contributions,” Corrigan said. From the outset when OUCU CUSO was formed in 2002, it began offering financial services, such as mortgage insurance and retirement funding including mutual funds and brokerage services. It also provides tax preparation services, and it completed about 120 tax returns in the 2003 tax season. In fact, the CUSO was formed expressly to provide financial services to Ohio University CU’s 18,000 members, the majority of whom are university employees. Prior to the CUSO’s formation, those services were provided to members by American Express Financial Advisors. “They owned the book of business,” said Corrigan, “but that money went outside of the credit union, along with the relationship with the members.” When OUCU decided it wanted to build its own book of financial services business with its members, the credit union and American Express Financial Advisors mutually agreed to go separate ways. Since OUCU CUSO is not a broker/dealer, it has a relationship with CUNA Brokerage Services which acts as an Office of Supervisory Jurisdiction (OSJ) for the CUSO. The CUSO has officially been offering financial services for going on three months, and Corrigan said their assets under management is “approaching” $1 million. OUCU has about $150 million in assets. For its 403b provider plan, OUCU CUSO has selected the American Fund family that includes about 29 mutual funds for the 403b retirement plan fund. According to the plan, university employees will sign a salary redirect form authorizing the deduction before taxes of a designated amount of money to be redirected from the university to American Funds. Employees will also designate the percentage of their money they want distributed among the various American Fund mutual funds. To some, gathering the endorsement of 36 university employees may not sound like a daunting task, but the CUSO has been working on collecting the quota of names since March. Corrigan said so far it’s collected about a dozen names. “We know from the credit union talking with members that some of these people have contributions and assets with one of the other 10 providers, and they’ve already told us they want to transfer all or part of their money to us, so we have to strike while the iron is hot,” he said. To facilitate the name collection, the CUSO designated the week of April 25 “403b Week.” Front and back office staff of the credit union were asked to “listen for cues” among members and employees of the university that indicated an interest in using the CUSOs 403b services. OUCU CUSO is not facing a deadline to collect the names, but Corrigan said “there’s a sense of urgency on our end.” -

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