Credit unions looking for growth in 2012 need to do a far betterjob on succession planning and retirement compensation given theimpact of benefits shortfall in the economy, according to a CUNAMutual Group specialist speaking to Montana credit unionleaders.

Jay Petty, CMG's executive benefit specialist, in remarks beforethe annual meeting recently of the Montana Credit Union Network inBillings, cautioned credit unions they need to “maintain acompensation package that is equal to or better than thecompetition” which might include supplemental executive retirementplans.

“Defined benefit pensions are a thing of the past and a 401(k)alone is not enough,” said Petty stressing it is hard to get ameaningful pay replacement at retirement from just a 401(k).

Petty said if a credit union has skilled, trusted managers, “youcan put in a plan that rewards them and makes it very difficult forthem to leave your credit union.”

Credit unions may have a CEO succession plan in place, butunless that plan has an executive development component along withfinancial incentives to retain top talent, credit unions risklosing potential CEO replacements to other organizations, includingcredit unions, he said.

Credit unions need to take a hard look at their succession plandetermining if they have a real one in place or simply a “Break inCase of Emergency Plan,” Petty said.

In essence, credit unions “need to avoid being caught in a firedrill,” he warned.

Overall, said Petty, it is vital that credit unions rewardsenior staffers for their long tenure considering these are theones that generated success. And so a dignified retirement packagehas to be extended to recognize those years of service, heconcluded.