For more information:
Phil Tschudy 608/231-7188 philip.tschudy@cunamutual.com
Rick Uhlmann 608/231-8940 rick.uhlmann@cunamutual.com
June 6, 2008
CUNA Mutual Expands Distribution of its 401(k) Retirement Program
Nationally Recognized Program Will Help CUs Grow and Better Serve SEGs, Small Businesses
MADISON, Wis. – CUNA Mutual Group is expanding its nationally recognized and top-ranked 401(k) retirement program beyond credit unions to include select employee groups, business members and other local businesses.
The expansion will enable credit unions with a business services strategy to grow and enjoy the other benefits of entering 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. “This is part of CUNA Mutual’s ‘Win/Win’ strategy and one more way we can demonstrate our commitment and innovation to the credit union marketplace,” he said.
Many credit unions are excellent at helping individual members prepare for retirement on a retail product basis through CDs, mutual funds and annuities, and 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 and is targeted for credit unions that already have a financial advisor serving members’ retirement and investment needs. “More than 97 percent 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 CU products (i.e. lending, checking accounts, other retail products)
- Increase retirement expertise awareness within the community
- Remain relevant to baby boomers, while helping them do a better job of saving for retirement
Since 1996, CUNA Mutual has been a top-ranked provider of retirement plans by organizations such as 401kExchange and the Boston Research Group. CUNA Mutual currently has 60 percent of the 401(k) marketplace in credit unions, representing approximately 4,500 plans and 125,000 plan participants.
CUNA Mutual is using its experience as a successful provider of top-ranked retirement plans to teach credit unions how to be successful in this business. “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 help kick off its expanded 401(k) program, CUNA Mutual hosted approximately 60 financial advisors June 2-4, at its Retirement Plan Services Symposium in Boston.
As an additional sign of commitment to this product, Thompson said CUNA Mutual is seeking to acquire businesses in the 401(k) provider space and has hired an investment banker to find such opportunities.
CUNA Mutual Group is a leading provider of financial services to cooperatives, credit unions, their members and valued customers worldwide. With more than 70 years of market commitment, CUNA Mutual’s vision is unwavering: to be a trusted business partner who delivers service excellence and customer-focused, best-in-class products and market-driven innovation. More information on the company is available on the company’s Web site at www.cunamutual.com.
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