EXCLUSIVE ARTICLE

Loan Regime Split Dollar:
The Importance of a Plan Document

The purpose of this article is to help Credit Union executives understand what goes into a well-drafted LRSD arrangement.

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You are the CEO of a thriving credit union. Your leadership has put the credit union on solid financial footing. Your regulators are happy with the way you’re running things, your membership is growing, and your board of directors wants to keep you around for a long time! So they’ve decided to reward your efforts by offering you a loan regime split dollar plan (or “LRSD”), which is also known as collateral assignment split dollar (or “CASD”). Under current tax law, this type of Executive Benefit Plan provides tax free income to you while you are employed and/or while you are retired.

So how does this type of plan work?