The Five-Dimensional Cost of Executive Benefits

What Credit Union Boards See, and What They Miss

Executive benefit proposals are often evaluated on a handful of familiar metrics: projected retirement income, balance sheet treatment, earnings impact, and perceived cost recovery. While these measures are important, they tell only part of the story.

This whitepaper introduces a five-dimensional framework for evaluating executive benefit structures based on their full economic impact. Rather than focusing solely on how a plan appears in financial statements, it examines present-value institutional cost, opportunity cost, interest rate risk, and the duration of capital commitment to provide boards with a more complete picture of long-term consequences.

What You’ll Learn

This paper explores:

• Why financial reporting alone can obscure the true economics of executive benefit structures.
• How to evaluate executive benefit proposals across five dimensions instead of one or two.
• The differences between funded and unfunded 457(f) plans and Loan Regime Split Dollar (LRSD) beyond surface-level illustrations.
• How opportunity cost, Net Economic Value (NEV), and Weighted Average Life (WAL) can materially change a board’s evaluation.
• A practical framework for making more informed, defensible executive benefit decisions.