An official website of the United States government

News Español Contact Us

About
About
Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.
Regulation & Supervision
Regulation & Supervision
The NCUA protects the safety and soundness of the credit union system by identifying, monitoring and reducing risks to the National Credit Union Share Insurance Fund. Backed by the full faith and credit of the United States, the Share Insurance Fund provides up to $250,000 of federal share insurance to millions of account holders in all federal credit unions and the overwhelming majority of state-chartered credit unions.
Analysis
Analysis
The NCUA’s economists and analysts compile data on the credit union system’s financial performance, merger activity, changes in credit union chartering and fields of membership, as well as broader economic trends affecting credit unions. Users can find information on a single credit union or analyze broader nation-wide trends.
Support Services
Support Services
The NCUA provides a number of support services to the credit union system, such as providing training, grants and loans, chartering, and field-of-membership services; maintaining the health and stability of Share Insurance Fund; managing the assets of failed credit unions; and providing emergency liquidity.
Consumers
Consumers
The NCUA works to protect credit union members and consumers, raise awareness of potential frauds, facilitate access to affordable financial services, and educate consumers on the importance of savings and how they can improve their financial well-being.
News
News
Stay up to date on the NCUA's activities by subscribing to the NCUA's Express messages. Read press releases, speeches, testimony, and Annual Reports. Register for upcoming conferences and events.
Cybersecurity Resources
Cybersecurity Resources
Cyberattacks and cybersecurity vulnerabilities pose significant risks to the financial system. Because of vulnerabilities within the credit union industry and the broader financial system to potential cyberattacks, cybersecurity is one of the NCUA’s top supervisory priorities and a top-tier risk under the agency’s enterprise risk-management program.

Split Dollar Life Insurance

05-0117 / January 2005

Split Dollar Life Insurance

Subject

Employee Benefits

Historic Status

Non-historic

Steven D. Eimert, Esq.
Sherin and Lodgen LLP
101 Federal Street
Boston, MA 02110

Re: Split Dollar Life Insurance.

Dear Mr. Eimert:

You have asked if a federal credit union (FCU) may use split dollar life insurance to fund employee benefit obligations. Based on your description of the arrangement, we have no legal objection.

You have described the split dollar arrangement as owned by the employee and paid for by the FCU. The FCU treats the split dollar arrangement as a nominal loan to the employee to conform to Internal Revenue Service regulations to obtain favorable tax treatment. You also have indicated the split dollar arrangement complies with §701.19 of NCUA’s regulations regarding benefits for employees of FCUs; the attached Office of General Counsel opinion letters 03-0512 and 04-0453, dated February 27, 2004 and November 24, 2004, respectively, regarding funding employee benefits with life insurance; and general safety and soundness considerations.

Please contact Staff Attorney Frank Kressman with any additional questions or if we can be of further assistance.

Sincerely,

/s/

Sheila A. Albin
Associate General Counsel

GC/FSK:bhs
05-0117
Attachments

Last modified on

11/14/24