FEATURE Employer goals of recruiting,

retaining and rewarding key talent can be accomplished utilizing a comprehensive benefit package

as long as we remember that “one size does not always fit all”.

Short-Term Financial Needs: Instead of offering a defined benefit SERP that pays solely at retirement in 30 years, a defined contribution approach may be preferred. For the first 10 years, bank contributions are made to the employee’s re- tirement account. However, from age 45 to 55, the employee is allowed to take a portion, or all, of the bank’s annual contribution in cash to help pay college tuition. Any contri- butions not deferred into the retirement account will reduce his future benefit, but the employee can make that decision each year as priorities change. The employee also may be given the option to defer his own salary in later years to bring the retirement benefit back to the previous amount.

Survivor Income Benefits: By purchasing bank-owned life insurance (BOLI), a survivor income feature can be in- cluded as part of the design. The bank owns the policy, pays a one-time premium, and receives tax preferred income each year as the cash value increases. The policy death benefit can be used to provide a continuing stream of income to the employee’s family in the event of death.

Disability Insurance Benefits: If the employee is unable to work due to an accident or illness, disability insurance can be attached to the plan to replace lost salary income. If the bank already has a group disability plan to provide income to age 65, a unique policy can be customized to ensure that the desired retirement benefit will also be paid after age 65, even though the employee was unable to work to retirement.

While a retirement-focused benefit is still the most popular nonqualified plan today, these other considerations should be part of any executive benefit discussion. Employer goals of recruiting, retaining and rewarding key talent can be accomplished utilizing a comprehensive benefit package as long as we remember that “one size does not always fit all”.

Guarantees are subject to the claims paying ability of the issuing insurance company. Insurance services provided through NFP Executive Benefits, LLC (NFP EB), a subsidiary of NFP Corp. (NFP). Doing business in California as NFP Executive Benefits & Insurance Agency, LLC. (License #OH86767). Securities may be offered through Kestra Investment Services, LLC, member FINRA/SIPC. Kestra Investment Services, LLC is not affiliated with NFP or NFP EB.

Randy Kohls ( be reached at 612-940-2843. NFP Executive Benefits provides a new approach to Executive Benefit Plan and BOLI management, emphasizing on advisory services and administration. Our collective experience as one of the leading BOLI and Executive Benefit providers, qualifies us to recognize the needs of today’s marketplace and to develop solutions that address the needs of community banks.

Same Day ACH Debits (part 2)

Wendy Wishon, AAP, NCP, Senior Vice President, EPCOR

On September 15, the ACH Network expanded its faster payments op- tion, Same Day ACH, to allow the processing of Same Day ACH debits. While the Same Day ACH credit implementation was completed

successfully in 2016, there were some concerns about Same Day ACH debits leading up to the September 2017 start date. Analyses by the Federal Reserve Bank in early 2017 indicated that there were several Originators using invalid Effective Entry Dates, mostly inadvertently, in ACH debit files. These invalid or stale dates had the potential to cause serious issues for RDFIs, and for consumer Receivers as well. Taking a consumer’s ACH payment prior to the date the consumer authorized it is against the Rules, as well as having the potential to overdraw a consum- er’s account unnecessarily. An increase in claims of unauthorized debit entries could also have occurred, driving up unauthorized return rates and resulting in extra work for the RDFI. So far, and thankfully, we have not heard that many of these issues have arisen. We don’t yet have statistics on volume, however information shared

by NACHA with the Regional Payments Associations on September 15 indicated a smooth implementation, with forward Same Day ACH debit volume flowing through the Network. Early discussions with and education for Originators seemed to have gotten the message across about Effective Entry Dates and the potential risks of initiating ACH payments early. The final phase of Same Day ACH implementation will occur in

March 2018, when we require RDFIs to make Same Day ACH credit funds available for withdrawal at 5 pm RDFI local time. Allowing businesses and consumers to send and receive payments

and payment-related information on the same day through the ACH Network provides a ubiquitous solution to moving payments faster. Now that preparations for implementing the Same Day ACH rules are nearly complete, it’s time for businesses and financial institutions to start look- ing at the benefits of originating Same Day ACH payments. NACHA developed ten primary use cases for Same Day ACH payments, which is a good starting point for ODFIs when thinking about Same Day ACH origination. While the goal is not to move every existing ACH payment to a same day environment, there are certain payments that benefit all parties to be processed same day. Talking with your customers about the Same Day use cases may open the door to more product offerings and additional revenue. Overall the implementation of Same Day ACH has been without

major issue and that can be attributed to the focus on preparation by the industry. All financial institutions were required to be able to receive Same Day ACH, and everyone stepped up and made it happen!

EPCOR is a not-for-profit trade association devoted to providing timely and relevant payments education and support to our members to help them maintain compliance, improve operational processes, and mitigate risk and fraud. Through our affiliation with NACHA and other industry associations EPCOR fosters and promotes improvement of the payment systems which are in the best interest of our members.

MIB Community BANKING 9

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