A credit union should determine if it actually warrants making an investment by first identifying the actual or potential benefit it seeks to fund (for example, deferred compensation agreement, post-retirement benefit, or others).
For FCUs, the actual or potential benefit to be funded must be a defined benefit plan as defined in 29 U.S.C. 1002(35) or an employee benefit plan as defined in 29 U.S.C. 1002(3). For more information, see 12 CFR ยง 701.19(f), Benefits for employees of Federal credit unions, Definitions.
It is not appropriate to purchase an investment to recover an expense that the credit union has already incurred. The type of investment(s) for employee benefits, and the feature(s) of the investment(s) should be appropriate to meet the identified needs of the credit union.
Last updated September 25, 2017
