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Golden Parachute Memo
 

May 25, 2011

On Thursday, May 19, 2011 the NCUA finalized the rule for Part 750 - Golden parachute, indemnification payments:

The final rule prohibits federally insured credit unions that are insolvent, troubled or in conservatorship to enter into contracts to pay and to make golden parachute and indemnification payments except under certain circumstances (such as for the hiring of new management to help restore or improve the financial condition or in cases involving unassisted mergers).

It does allow, in some cases, an advance of indemnification payments where responsibility for a violation is still in dispute.

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Golden Parachute Q&A
 

May 25, 2011

NCUA has finalized Part 750, which prohibits certain “golden parachute” and indemnification payments. The golden parachute limitations apply to financially “troubled” credit unions. The limits do not apply to non-troubled credit unions, to pre-existing arrangements, to any death benefits, properly designed collateral assignment split dollar, bona fide SERP or other nonqualified deferred compensation plans (i.e., even troubled credit unions could continue to pay bona fide SERP benefits), or to certain limited severance plans.

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Tom Telford Selected As Executive Vice President For BFB
 

May 2, 2011

CHARLOTTE, NC     Tom Telford has been promoted to Executive Vice President at Burns-Fazzi, Brock (BFB) a Charlotte-based national executive benefits consultancy firm for credit unions. Rich Brock, Principal and Co-Founder of BFB made the announcement.

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NAFCU Proposes New Rule
 

August 2, 2010

NCUA has proposed a new rule that would prohibit certain “golden parachute” and indemnification payments.  The golden parachute limitations apply to financially “troubled” credit unions.  The limits do not apply to non-troubled credit unions, to pre-existing arrangements, to any death benefits, bona fide SERP or other nonqualified deferred compensation plans (i.e., even troubled credit unions could continue to pay bona fide SERP benefits), or to certain limited severance plans.  The indemnification payment provision prohibits a credit union (whether or not troubled) from reimbursing expenses (e.g., fines and attorneys’ fees) of an executive who incurs a civil monetary penalty, who is removed from office, or who receives a cease and desist action.  NCUA has fast-tracked the proposed rule, allowing only a 30-day comment period.

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The Perfect Storm
 

December 29, 2008

In the prior article describing the "perfect storm" that is swamping compensatory split dollar arrangements, we reviewed the changes to the law applicable to all split dollar plans that had intersected to apply to all compensatory split dollar arrangements. Those changes included the issuance of IRS Notices 2002-8 and 2007-43, and the adoption of the Final Split Dollar Regulations, and the adoption of Section 409A by Congress. That article defined compensatory split dollar arrangements, reviewed the income tax rules applicable to both pre-final regulation split dollar arrangements and those entered into after the effective date of the final regulations (or modified thereafter), and distinguished between the income tax treatment of post-final regulation split dollar arrangements taxed under the economic benefit regime and those taxed under the loan regime. That article concluded by providing that a follow-up article reviewing the extra layer of complexity compensatory split dollar arrangements entered into between tax-exempt employers and their executives added to the mix. This is that article.

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