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Executive Benefit Plan Administration: Excelling in Best Practices

By Jay Petty, EVP, The Sheeter Group

Are you a credit union that has executive benefit/SERP plans?  Let’s assume you have successfully implemented your plans – but you may be wondering – what’s next?  Where do we go from here?  What are the best practices in managing and monitoring managing my/our plans? 

This is what is known as “Plan Administration.”

Plan administration can be broken down into two parts – ‘Accounting/Regulatory’ items and the ‘Annual Review’ process.

In order to successfully administer an executive benefit plan, you must account for the plan correctly and comply with regulatory requirements from the NCUA, IRS and other agencies.   Below are some key items that you will need to consider.   

Accounting and Regulatory Items

  • Proper accounting at implementation – Asset, liability and income statement impact
  • Ongoing accounting entries
  • NCUA 5300 completion
  • IRS and Department of Labor compliance
  • Processing payouts and distributions – W2/payroll or insurance policy withdrawals


Many reputable providers will have a team that is dedicated to supporting credit unions with these essential functions.  This support would include a staff member with the required expertise as well as a secure on-line portal which serves as repository for plan information, accessible to credit unions. Additionally, credit union personnel benefit from timely email push notifications signaling the readiness of specific reports, facilitating streamlined communication and access.


Annual Review Process

The annual review process is also a critical part of plan administration.  This yearly review serves as an opportunity to refresh the CEO, board of directors and participants on the workings of your plans.  It is also an opportunity to perform certain checkups.  Below are the key items addressed:


  • Covered participants, Plan Benefits and vesting dates
  • Performance of any underlying investment and/or insurance products supporting the plan
  • Credit quality review of any underlying insurance products
  • Review of concentration limits
  • Analysis and discussion as to whether plan(s) are on track to provide the intended benefits.
  • Accounting and NCUA 5300 checkup
  • Resolving any CPA Audit or regulatory exam issues the credit union may have encountered.


Typically, the responsibility for driving this process lies with the partner you work with. This includes sending a reminder to the credit union regarding the upcoming annual review, creating the necessary annual review documentation, and setting a schedule for the review.   It's crucial to emphasize that the intended audience isn't limited to just the board and CEO;  every participant should have the opportunity for a confidential participant review to discuss significant life matters and any changes that might impact the plan, such as updates to beneficiaries and other changes.

Whether you choose to handle this internally or partner with an established provider, pursuing excellence in plan administration plays a pivotal role in the success of your plans.  Executive benefit/SERP plans are not “set it and forget it” programs.  The success of your program and plans will be greatly enhanced if you have excellence in plan administration.


Jay Petty is an Executive Vice President with The Sheeter Group. Jay has over 30 years of credit union experience and specializes in the consultation, design and implementation of executive benefit and supplemental executive retirement plans. The Sheeter Group is a leading provider of executive benefit plans designed to retain, recruit and assist credit unions with succession planning and leadership continuity.


Leveraging SERPs to Grow Your Credit Union

By Rob Fitzgerald, EVP, The Sheeter Group


SERP (Supplemental Executive Retirement Plan) plans have been crucial for the growth of credit unions. With the baby boomers rapidly exiting the employment market, the need to retain key talent is just as important as ever. If you read the publications like Credit Union Times, you are seeing the hiring of a new generation of leadership. What you might not think about is the butterfly effect from these hirings. A lot of times, a new CEO likes to bring in their own executive team with them. This creates gaps in a full executive team rather than just one individual. Even if they don’t bring their team with them, there will always be a deep dive into the performance of the existing executives. The conversation about SERPS starts with the CEOs, but truly successful CEOs want to surround themselves with talent to make the rest of their career much more productive.


A SERP is a non-qualified deferred compensation plan offered to a company’s key employees, including CEOs, CFOs and high-ranking officials.  They are typically used to retain talent, but are tied to both employee and company performance1.


At the Sheeter Group, we are having more and more conversations about the next level of executives with our business clients. This could be a situation where a CEO wants to have a long-term executive team. We are also having conversations with boards where a CEO is seeing the light at the end of the tunnel, and the board will have an important decision ahead about who will be the next leader of their organization. Maybe they have their next CEO in-house, and maybe not. All that to say, there are multitudes of situations that boards are finding themselves in, and the use of SERPs can be an essential part of succession planning and long-term growth.


Because credit unions abide by the non-profit tax codes, when it comes to plans specifically designed for your CEO and other execs, there are only a few types of plans the board can select from. This can be viewed as both positive and negative. On one hand, you don’t have as many options as some of the for-profit institutions that you are vying with for talent. On the other hand, you only must learn about the few types available and design a plan within the framework of those types. The two most common plans in the credit union market are 457 plans and Split Dollar Plans. 162 Bonus Plans have also been popular due to the current rate environment.


At Sheeter Group, we can help you evaluate the best way for the credit union to provide these benefits. There are pros and cons to each. Is the tax on these plans an issue? Is the long-term nature of the plan a problem for your board? Is liquidity an issue? These are all questions that need to be addressed in the design of a SERP. Keep in mind that these are highly customizable for each situation. You might have a different plan type for each of your executives. Some executives have a couple of different plan types for themselves. Even if your board doesn’t see that the use of a SERP can help them, they should still consult with their financial, tax and legal professionals to educate themselves for when the time comes. The fact is these plans are becoming more and more common. Even if you aren’t using them now, when you go to hire your next CEO and C-suite, they will likely be expecting these as part of the compensation package.



1 smartassetTM, “Supplemental Executive Retirement Plans (SERPs)” Rachel Cutero, 2-4-2023, Supplemental Executive Retirement Plans (SERPs) - SmartAsset

Neither MML Investors Services, LLC nor any of its subsidiaries, employees or representatives are authorized to give legal or tax advice.  Consult your own personal attorney legal or tax counsel for advice on specific legal and tax matters.


By Robert Fitzgerald, Jr., Executive Vice President – South, for The Sheeter Group


Securities offered through qualified registered representatives of MML Investors Services, LLC, Member SIPC ( Supervisory office: 530 Gaither Road Suite 350, Rockville, MD 20850, (301) 355-5800. The Sheeter Group is not a subsidiary or affiliate of MML Investors Services, LLC or its affiliated companies. CRN202508-5221764


Don’t Let Your Credit Union Flatline

By Jay Petty, EVP, The Sheeter Group


With the aging of the baby boomers, we are seeing a tidal wave of credit union CEO retirements.

Despite seeing great progress in the credit union movement, we find that many boards of directors are unprepared and have not planned adequately for a CEO’s pending retirement. Some boards will wait until the day comes and then go into reactive mode.

Progressive credit unions address these transitions years in advance. It involves a comprehensive succession/leadership continuity plan. While many credit unions have an existing succession plan, these tend to be reactive in nature: In case of emergency, break the glass. A proactive leadership succession continuity plan involves a regular assessment of a credit union’s internal talent with a keen eye on identifying existing executives that demonstrate the interest and characteristics to become the next CEO. 

The impact of getting caught with your pants down

The absence of an effective and engaged CEO can result in strategic drift or flatlining. ‘We should wait until we get the new CEO on board,’ then ‘We need to wait until the new CEO gets acclimated,’ are common board responses when important strategic issues are addressed during a CEO succession.

This scenario creates credit unions that strategically flatline for a period of years. Yes, the branches stay open and the phones get answered, but the strategic initiatives that are important to a credit union’s ongoing relevance will be put on hold. This can have a dramatic impact on implementing key strategic projects that are important to your members.

The CEO search process

While many credit unions find it necessary to recruit a new CEO from outside, or, at the very least look at outside candidates from a due diligence perspective, risks and issues are associated with this process. The process can be very time consuming and expensive.

Some of the activities and expenses the board will face are:

  1. Name a board CEO search committee
  2. Interview/vet executive search firms
  3. Select Search firm – absorb associated expense
  4. Review candidates’ written responses
  5. Telephone interviews of candidates
  6. Face-to-face interviews with candidates – absorb associated expense
  7. Select candidate
  8. Relocate candidate if necessary – absorb associated expense
  9. Accept a new CEO introductory period of 6 to 12 months

Many boards have successfully undertaken this process. However, in cases where a board has gone through this process and the new CEO does not work out, it means it is time to start the process anew. This can cause considerable angst for the board and lead to years of strategic drift for the credit union.

The absence of an effective and engaged CEO can result in strategic drift or flatlining. 

A progressive leadership continuity plan

A true leadership continuity plan will first involve identifying internal candidates that have the experience and attributes that are necessary to become a successful CEO. Once those candidates are identified, a comprehensive development plan can be implemented to assess and address the candidates’ strengths and weaknesses. This development plan can include outside education, such as completing the CUES CEO institute or CUNA Management School and can address other issues such as encouraging community involvement and outside activities like the Chamber of Commerce or specific educational tasks. Many credit unions will rotate responsibilities of key executives, giving potential CEO candidates valuable experience in the multiple disciplines needed, such as accounting and finance, marketing, human resources, information technology, lending and operations. 

Some credit unions find that they do not have any internal candidates for consideration or interested in the CEO position. In these cases, a credit union may have to make room for an outside hire. Addressing this issue years in advance will give a new hire time to acclimate to the credit union prior to the CEO’s retirement.

Further, many credit unions choose to protect their investment by implementing executive benefit and supplemental executive retirement plans with a focus on retention of key succession candidates and enabling the existing CEO to retire comfortably at the right time for the organization.

This may seem a daunting task for a board to handle on its own, so hiring a reputable outside firm can prove to be a wise investment to guide your leadership development plan and create a customized executive benefit strategy. A comprehensive plan like this can take years to implement. Regular discussions and updates should be part of a board strategic planning process. 

Not just for credit unions with near term CEO retirements

Although the pressing need is for a credit union that has a CEO nearing retirement, many progressive credit unions are choosing to implement this process regardless of where their current CEO stands in their career lifecycle. This enables credit unions to be prepared for CEO vacancies that occur for a number of reasons, including voluntary departures for another CEO position, health or family-related departures, and even the unfortunate cases of employment terminations. 

As we begin a new year, it is wise for all boards to ask themselves whether they have adequately addressed leadership continuity within their credit unions.





Tarjamon Relief's Gonzalo Lassally and Will Felder, who served together in Afghanistan in the mid-2000s, -- along with The Sheeter Group’s CEO, Andy Sheeter – share how they have helped many Afghan interpreters and their families escape the country to a neighboring country and then wait for passage to the United States. This interview goes into depth on how these Afghan interpreters risked their lives to help the U.S. Military and how The Sheeter Group’s contribution to the Tarjoman Relief mission has helped these same brave people in return.