MADISON, Wis. (6/9/08)--CUNA Mutual Group is expanding its 401(k) retirement program beyond credit unions to include select employee groups (SEGs), business members and other local businesses. The expansion means credit unions with a business services strategy can enter the institutional retirement plan market, said CUNA Mutual President/CEO Jeff Post. “This is much more than just offering a new product. It’s about helping credit unions develop a new business model that can provide them with sustainable growth in income and membership for many years,” Post said.
Many credit unions are excellent at helping individual members prepare for retirement through certificates of deposit, mutual funds and annuities. It's a natural progression for them to also help members with their "institutional" retirement plans at work, said Kevin Thompson, CUNA Mutual vice president of asset accumulation products. The expanded 401(k) sales program is already in place at more than 60 credit unions nationwide. It targets credit unions that already have a financial advisor serving members’ retirement and investment needs. “More than 97% of all 401(k) plans in the industry are sold through an advisor or broker, which is why it makes sense to build resources and a distribution channel based on an advisory model,” Thompson said. Thompson said offering a 401(k) program as part of a business services strategy can help credit unions:
* Attract and retain members (including younger ones); * Generate significant and ongoing fee income from plan sales; * Attract 401(k) rollovers and individual rollovers from participants throughout their lifetime as they change jobs or retire; * Strengthen current relationships with SEGs and business members; * Increase cross-selling opportunities for credit union products; * Increase retirement expertise awareness within the community; and * Remain relevant to baby boomers while helping them save more for retirement.
CUNA Mutual has 60% of the 401(k) marketplace in credit unions--about 4,500 plans and 125,000 plan participants. “We’ve built an experienced wholesaling team to help financial advisors sell plans through strategic marketing programs, training, sales support and face-to-face client meetings,” Thompson said. To kick off the expanded program, CUNA Mutual hosted about 60 financial advisors June 2-4 at its Retirement Plan Services Symposium in Boston. CUNA Mutual is seeking to acquire businesses in the 401(k) provider space and has hired an investment banker to find such opportunities, Thompson said.