SAN DIEGO — Without an executive benefits package for the entire executive team,credit unions risk losing potential CEO replacements tocompetitors, said CUNA Mutual Group's Scott Albraccio, executive benefits sales manager.

Albraccio spoke to a full room Monday on the topic during abreakout session at CUNA's America's Credit Union Conference.

The CUNA 2011-2012 CEO Total Compensation Survey suggests 21% ofcredit union CEOs will retire during the next five years.

To prepare, credit unions should develop proper compensationpackages for executives and their top lieutenants, Albracciosaid.

Deferred compensation plans for C-level executives can create“golden handcuffs” that will prevent them from leaving if a new CEOjoins the team, while providing continuity during the transitionperiod.

“Credit union compensation plans can no longer just focus on theCEO,” Albraccio said. “We also need to look out for our C-levelexecutives, those that are likely to be the future CEOs.”

At the same time, existing CEOs are facing a potentialcompensation gap when they retire. The guidelines illustrated bythe Employee Retirement Income Security Act restrict the amount ofmoney highly compensated employees can contribute to their 401Kcompared to lower-compensated employees.

On average, retiring executives receive 38% of their currentincome upon retirement, whereas frontline employees receive 60% to65% of their income.

Albraccio suggested credit unions begin implementing aSupplemental Executive Retirement Plan to eliminate the largedisparity and avoid the potentially troublesome guidelines ofERISA.

SERPs put credit unions in a position to maintain continuity ofstrategic decision making while addressing financial needs ofsenior executives, so they can focus on long-term strategic goalsand financial success on the job, Albraccio said.

He also advised attendees to have a formal CEO succession planin place that has an executive development component alongwith financial incentives to retain top talent. Only 63% ofcredit unions have a formal succession plan in place, he said.

Some have a “real” succession plan while others have whathe termed a “Break in Case of Emergency” plan. The latter is anemergency CEO succession plan that prepares the credit unionfor the death or rapid, unexpected departure of the CEO. It's ashort-term disaster recovery plan to keep the institution goinguntil a new, permanent CEO is hired.

“The 'Break in Case of Emergency Plan' is important, but a truesuccession plan doesn't just choose internal successors to a creditunion's top executive positions. It prepares internal successors,which provides more stability and consistency with theorganization's strategic plan,” Albraccio said.