LAS VEGAS — Offering 401(k) retirement plans to select employee groups, business members and other businesses may be a way to establish long-term relationship with the small-business market, a panel told attendees at NACUSO's annual conference last week.
CUNA Mutual's Steve Dowden, senior vice president of asset accumulation sales distribution, moderated the panel that included Kevin Thompson, CUNA Mutual vice president of asset accumulation products; Peggy Mostowy, assistant vice president of business development at Clearview Federal Credit Union; and Chuck Purvis, senior vice president of Coastal FCU.
Credit unions are showing more interest in offering retirement programs as part of an overall business services strategy, Thompson said. "That makes sense, because offering 401(k) programs to SEGs and small businesses directly supports a business services growth strategy."
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Thompson said marketing retirement services can help credit unions attract and retain members including younger ones as well as generate ongoing fee income from plan sales.
Credit unions can build through 401(k) rollovers and individual rollovers from participants, strengthen current business relationships, increase cross selling opportunities and remain relevant to baby boomers, he added.
"For Coastal FCU, it gives us an opportunity to deepen the relationship with our 1,100 SEGs and provide valuable business services to diversify and grow our revenues," Purvis said.
It also helps the credit union meet demand from small businesses for reasonably priced services from a local, trusted and tenured institution, Purvis pointed out. "The average community bank in our market is less than seven years old. Our credit union has an established track record here over the last 41 years," Purvis said.
Clearview's Mostowy said her credit union's target market is small businesses with annual sales up to $5 million and the mid-market with annual sales between $5 million and $10 million.
"This product will assist small businesses as they grow and their needs become more complex. With mid-market clients, it will deepen the relationship and provide us the opportunity to compete with the larger financial institutions," Mostowy said.
Coastal and Clearview have partnered with CUNA Mutual to offer the company's 401(k) program.
"The expansion of our 401(k) program is a good example of CUNA Mutual transforming its business to bring new value, new products and better services to CUs and their members," Dowden said. "Pivoting the company by developing new products and new markets that diversify CUNA Mutual provides growth opportunities for the company and for credit unions."
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