Pub. 6 2015 Issue 1

spring 2015 19 West Virginia Banker Outsource fiduciary responsibilities. While the typical bank keeps all three of the principal fiduciary roles for its retirement plans—named fiduciary, trustee, and plan administrator—exec- utives or employees assigned responsibility for these roles rarely know what they entail or what is expected of them. There is a better way: outsource. The bottom line: through outsourcing, a bank can save time, money, headaches, and risk. Consider starting a multiple employer plan for your commercial customers The growing popularity of multiple employer plans (MEPs) is due to their low fees, reduced fiduciary responsibility and relative ease of administration – offer a way to either out- source your own retirement plan burdens, or to generate fee in- come by starting your own MEP for your commercial customers. Maximize your non-qualified executive benefit plan – where there are no coverage, eligibility or participation requirements. An executive benefit plan affords greater design flexibility as an em- ployer can decide to provide non-qualified deferred compensation benefits only to a select group of executives or highly compensat- ed employees. This allows the employer to provide rewards and incentives based on an employee-by-employee approach. Use BOLI. Using Bank Owned Life Insurance (“BOLI”) as a tax-free asset will earn more net income than a taxable asset like a bond, making it attractive for a sound benefits financing strategy. BOLI is also a more efficient purchase as it can be bought in sin- gle premium amounts … unlike municipals, which are generally only available in smaller dollar amounts. Don’t give up on your defined benefit plan. While the last 10-15 years have been difficult for employers maintaining a defined ben- efit plan as part of their overall retirement programs due to their high costs that may be about to change. Among other factors, historically low interest rates, which cause plan liabilities to in- crease every time they drop, appear to have nearly hit bottom and are poised to begin rising as soon as the Federal Reserve suspends the accommodative support of growth through an expansionary monetary policy. n To learnmore about Pentegra’s retirement plan solutions for banks and their employees, contact Mark Hogan, Regional Director, at mhogan@ pentegra.com or 800.872.3473.