With a vast selection of IRA plans to choose from, firm government regulations concerning taxation, limits on contributions, and a list of technical exceptions, creating a successful IRA program for your credit union can be a difficult process. The potential payoff though, makes “doing your homework” worthwhile.
In 2000, 15.1 million taxpayers contributed $36.5 billion dollars to their IRA accounts (Uncle Fed’s Tax Board). According to the Investment Company Institute, IRAs made up the single largest component of the $3.5 trillion dollar retirement market by year-end 2004. The numbers say it all.
How can you prep your IRA program for success by April 15? Use the experience of Telcoe Federal Credit Union ($160 million, Little Rock, AR) and these three simple steps to get you started in the right direction.
Step 1: Rates
Telcoe Federal Credit Union made the industry’s top 25 list in terms of average IRA balance clocking in with an average of $40,301 (06/05 data). This success, says Telcoe President Sarah Mosley, is significantly attributed to Telcoe’s “competitive day-in day-out rates.”
Step 2: Education
Education is incredibly important in terms of providing knowledge to staff as well as members. Telcoe uses Bankers Systems to train its management-level employees in order to properly prepare them for dealing with IRA clients. IRAs are not turned over to tellers or MSRs, as Mosley believes that too much turnover would occur without departmental staff that possesses higher-level experience. Additionally, a Financial Services Representative has been on staff for the last three to four years to provide additional assistance.
Step 3: Passion
Making sure that members are informed on the latest developments is also imperative. In fact, knowing her members so well has helped Mosley to achieve one of her IRA goals: obtaining higher rate CD programs for those retired members feeling less confident in their ability to directly invest in the stock market themselves.
Your No. 2 pencils are sharpened, you’ve studied the industry inside and out, and gotten plenty of sleep the night before. But are you really ready to sell the IRAs? Mosley believes that having passion for the program makes all the difference. Mosley, who refers to the Roth IRA and its capabilities as “beautiful,” certainly has the passion. Does your credit union?