Guest blog post by Jennifer Basset, writer/editor at Ascensus.

Ascensus is the NAFCU Services Preferred Partner for IRA, Retirement Plan, and Health Savings Account (HSA) Solutions Software, Training, Documents and Consulting.

With many of your members getting ready to take out their 2013 required minimum distributions (RMDs), now is the perfect time to brush up on the Individual Retirement Account (IRA) withholding notice and election requirements for credit unions.

Withholding is an important compliance issue for IRAs. Like withholding from a paycheck, IRA distribution withholding prepays income taxes. Taxes withheld from IRA distributions are credited against an individual’s total tax liability for the year. So not only is withholding required by law, it’s a valuable customer service that you provide your members.

Notice Requirement

For annual IRA distributions of $200 or more, your credit union must provide a withholding notice. This notice allows the member (i.e., the IRA owner or beneficiary) to choose exactly how much or what percentage they want withheld— including not having any withholding at all. Even if members choose not to withhold taxes from their distributions, they are still responsible for paying taxes on the distribution. The notice also lets them know they have the right to change their mind about how much they want withheld. If your credit union fails to give members a withholding notice, the IRS could assess a $10 penalty for each failure.

Frequency

If distributions are taken less frequently than quarterly, you must provide a withholding notice before each distribution, but no more than six months before each distribution. If distributions are taken quarterly or more frequently, you must provide the withholding notice once per year at a reasonable time before the first payment each year.

Format

To comply with the withholding notice requirements, credit unions must provide members with an IRS Form W-4P, Withholding Certificate for Pension or Annuity Payments, or a substitute form. If your credit union offers a substitute form, the form must follow certain required guidelines or be submitted to the IRS for approval. These guidelines are outlined in IRS News Release IR-83-3.

To prove that the form has been sent to the member on a timely basis, you should date the form before mailing and retain a copy in the member’s file. You should send two copies to the member: one to keep and, if a change is desired, one to return with signature to your credit union.

Election

Members may elect to withhold 10 percent or more on IRA distributions. Members also may elect to waive withholding. The election is authorized when the member signs IRS Form W-4P (or a substitute form). Once your member makes a withholding election, it is valid until revoked. You should retain a copy of the election in the member’s file. If the member does not elect out of withholding, you must withhold 10 percent of the IRA distribution. A member may revoke an election at any time by signing another Form W-4P. Many credit unions integrate the withholding election into the withdrawal statement so that Form W-4P is available for each distribution. But when a member has established a series of scheduled payments, you may send a Form W-4P to the member according to the notice frequency stated previously.

Summary

Compliance with the IRS withholding notice provisions is all in the timing and retention. This may be the best time to get withholding notices out to all of your members who are scheduled for RMDs in 2013. It is also the right time to plan any other withholding notices that are needed to meet the IRA requirements.

Ascensus is the NAFCU Services Preferred Partner for IRA, Retirement Plan, and Health Savings Account (HSA) Solutions Software, Training, Documents and Consulting.

Comment on this blog post.

Originally posted on NCR’s blog.

Guest post written by Sundeep Kapur, Director Strategic Marketing-Ecommerce, NCR Corporation.

NCR Corporation is the NAFCU Services Preferred Partner for ATM Products and Services, Teller Cash Recyclers (TCRs).

You buy a cup of coffee and the cashier hands you a receipt with an incentive to join the company’s Facebook page. You’re not completely sure if you should. What the cashier forgot was that your order was messed up, you waited for more than 10 minutes, and the manager was not in the store. So what do you do?

You like the brand on Facebook only to tell all your friends about your bad experience. Isn’t it ironic that you have to like them to tell them that you really do not like them!

A complete stranger walks up to you in the parking lot and hands you a flyer. It is a coupon to your favorite store, plus a chance to win a digital reader. Would you give this stranger your phone number? Would you introduce the stranger to your family and friends? Would you invite the stranger into your home?

Yet the same thing happens online and you willingly become friends via an unknown brand ambassador – perhaps a sponsored story via a friend of a friend.

Soon, both brands, the coffee company and your favorite store start communicating with you as if they are your best friend. Offers pour in, they are personalized as if they know you, and they touch you more times in one week than you call your best friend Jill in one month!

Let’s bring this closer to home. Our consumer walks up to an ATM, we ask them to choose their language, next we ask them what they want to do, now while the cash is being counted we tell them that we have an awesome offer for them. Really! You do not know that I speak English, you do not remember my favorite transaction, and suddenly you pretend like you know what is best for me!

Financial institutions have an incredible opportunity to leverage data, consumer trust, and mobility to build interactive relationships with the consumer in both the real and the virtual world.

Imagine a transaction that started an ATM with, “Hello Kate” (she speaks English). “Do you still want $120?” (They remembered.) Now, while the transaction is being “readied,” the financial institution can leverage the warmth to make a targeted offer. If you do this well, you can continue the conversation on social media.

Rather than asking Kate to like your institution, why not ask Kate about her experience or remind her about something important – like a bill that needs to be paid or an upcoming renewal of a certificate of deposit. Or, even think about prompting her to visit your social media site.

“How much does a family of four spend on drinks if they were to eat out every week of the year?” Check out our Facebook page to see how much we spend (leads to a like), download a budget calculator (could be an app), and pick up a coupon for appetizers at one of five restaurants (you start building up their preferences).

This same transaction can take place on online banking, at a branch, or even at the call center. The key is that the institution should recognize the consumer, know what they want, and try their best to help the consumer along.

Successful consumer engagement is driven less by likes and more by what happens after the like – both in the real and the virtual world.

Successful social media brands have used social media to do five things –

1 – Find compatible consumers
2 – Know more about their consumers
3 – Inspire their consumers to become brand ambassadors
4 – Listen to learn about their consumers
5 – Look for ways to quantify the return on effort and investment

You can do even better if you look for ways to merge real world and virtual transactions – social integration is a key mantra for success. It pays to integrate your marketing efforts to show your consumer that you know what is going on.

Financial institutions need to look for ways to leverage consumer trust, consumer preferences, and consumer interaction to build long term mutually profitable relationships. Integrated marketing is the key mantra to driving consumer engagement.

NCR Corporation is the NAFCU Services Preferred Partner for ATM Products and Services, Teller Cash Recyclers (TCRs).

For contact info and more educational resources, visit: www.nafcu.org/NCR

Comment on this post.

Guest post written by Bob Long, Senior Vice President, Vantiv.

Vantiv is the NAFCU Services Preferred Partner for ATM, Debit Card & Gateway Processing; Credit Card Processing & Servicing; Merchant Services.

Many factors over the past few decades have driven credit and debit to be ubiquitous payment types today. But one thing is for sure: debit and credit cards did not grow by themselves. It took a commitment by issuers, acquirers, consumers and merchants to make the life-cycle of the card transaction work.

Through my experience, I’ve found that the word “commitment” summarizes those member financial institutions that move from good to great. This is best accomplished through a focus in three important areas:

Management Commitment: The management of your card program requires the proper resources and knowledge. Balancing risk, measuring growth, equating the increased non-interest income with card usage, focusing on growing the yield of your revolving balances – this all takes time. Seek out ways to take the complexity out of your credit program. Unsecured lending can be complex enough, and when you tie underwriting methodologies to multiple card product types, it gets even more complex. Use the resources of your credit union with those of your processing partner and commit to a collaborative, consultative approach.

Growth Commitment: Invest in your plan with both time and money. Work with your processing partner to formulate a plan that can bring significant financial growth from your investment. For your credit issuance program, evaluate a loyalty strategy to increase the transactions and revolving balances of your portfolio. For your debit program, focus on a way to leverage real-time loyalty that has financial benefits equal to or greater than your merchant counterparts. Merchant-funded loyalty is a solid proposition that has value to both the issuer and acquirer. Go outside the box and seek new methods to drive non-interest income and increase your net interest margins. What if you could take the gift card mall concept you see at your local retailers and apply that to your credit union?

Strategic Commitment: Employ an omni-channel approach with a consistent, strategic message. From the executive management suite to the front line tellers, from operations to member services, focus people and resources to increase penetration, activation and usage of your card portfolios. While a member is making an in-branch deposit, are you creating a dialogue about card usage? Are you confirming that your member has a debit or credit card…is actively using their card…or knows how you differ from the competition? How are you positioned to sell your prepaid gift card to your members? May I venture to guess that they may be in your teller’s drawer, and mentioned less than 5 times a month?

Commit to be different. Commit to invest in your management team. Commit the time, focus and resources.

Vantiv is the NAFCU Services Preferred Partner for ATM, Debit Card & Gateway Processing; Credit Card Processing & Servicing; Merchant Services.

For contact info and more educational resources, visit: www.nafcu.org/vantiv.

Comment on this post.

Originally posted on SAS Institute Inc.’s Blog.

Guest post written by Wilson Raj, Global Customer Intelligence Director, SAS Institute Inc.

SAS Institute Inc. is the NAFCU Services Preferred Partner for Business Intelligence, Predictive Analytics Software & Risk Assessment.

In the last decade, CMOs have made great strides in elevating their stature. According to the latest SpencerStuart survey, CMO tenure has steadily climbed from 23 months in 2004 to 45 months in 2012. What are the reasons for this improved longevity? Marketers are becoming more strategic-minded, they’re taking a more expansive view of their customer, and they’re adding more sophistication and data-driven decisions in marketing campaigns and operations.

The swift adoption of mobile devices and the proliferation of digital channels have created opportunities for highly interactive, rich communications between consumers and brands. But those very same circumstances can be a double-edged sword as more consumers demonstrate little tolerance for irrelevant, ill-timed, and “creepy” communications.

Marketers may be on a positive trajectory as CMO tenure suggests, but the path is still fraught with uncertainly. CMOs are confronted daily with the challenges and opportunities of maximizing digital marketing, enabling dynamic multichannel interactions, enriching customer experience, utilizing marketing analytics, and—of course—harnessing Big Data.

These hot marketing topics are inextricably linked to each other, and also to the CMO’s ultimate goal of delivering sustainable business growth. To this end, CMOs must not lose sight of two imperatives for their marketing technologies:

1.      Ready accessibility to analytics

Marketers must be able to unleash the power of analytics throughout the marketing department and in all marketing processes (activities related to strategy and planning, campaign and interaction management, and customer experience management). Analytics, when highly accessible in a marketing system, allow marketers to create value for their customers, while giving businesses an instant edge for improving marketing performance and reducing costs.

For instance, marketing automation uses sophisticated analytics to automatically improve relevancy and responsiveness to individual prospects regardless of media or channel. Real-time analytics allow marketers to discover and react in real time to how consumers are interacting with your brand.

The upshot: greater agility; better targeting; personalized offers; coordinated campaigns; connected experiences.

2.     Alignment and accountability for growth

The analytics must provide ever clearer “line of sight” to revenue growth and profitability, especially as digital spend in marketing budgets continue to rise. CMOs must also insist that their enterprise-marketing platform enable a single point of marketing collaboration: one that aligns objectives, planning, and execution across various marketing roles in the organization for greater accountability.

A recent Econsultancy report indicated that 71 percent of businesses plan to increase digital marketing budgets. The average expected increase (of those increasing digital spend) is a significant 28 percent. The result: a higher degree of scrutiny by the C-suite for digital. Analytically powered marketing platforms provide more transparency to marketing personnel and helps the entire organization align resources to objectives, streamline production processes, track budgets and expenses, and improve overall collaboration.

The upshot: better collaboration; greater control of marketing spend; stronger marketing investment decisions – especially in digital; more CMO credibility among C-suite peers.

In the final view, marketers need demonstrable business results in their quest to maximize digital marketing impact and deliver sustainable growth. Are you evaluating your marketing technologies through the twin lenses of analytics accessibility and marketing accountability?

To learn more, please start by visiting the Digital Marketing Resource Center and discover why digital marketing requires the agility and collaboration enabled by analytics.

SAS Institute Inc. is the NAFCU Services Preferred Partner for Business Intelligence, Predictive Analytics Software & Risk Assessment.

For contact info and more educational resources, visit: www.nafcu.org/sas

Comment on this post.

Guest post written by Jay Slagel, President and CEO, Allied Solutions.

Allied Solutions is the NAFCU Services Preferred Partner for Insurance—Bond, Creditor Placed (CPI), Guaranteed Auto Protection (GAP), and Mechanical Breakdown (MBP); iSolutions; rateGenius.

It is not surprising that fraud in the workplace increases during an economic crisis or recession and small businesses (including large and small credit unions) may be vulnerable. Internal fraud typically occurs when someone has an incentive, such as a financial or economic hardship, plus the opportunity. National statistics show that it typically takes two years from the time fraud begins to the time of discovery. As a result, while some entities have already discovered fraud born of the recession, many more are likely to uncover problems in the coming years.

Management staff may be wearing multiple hats to keep up with more work, giving them less time to monitor employees, keep an eye on expenses and oversee their internal operation. During these periods, there might be the potential for a credit union to drop the ball in areas of oversight. Below are several ways to help fight fraud:

Establish fraud controls. Conduct a quick assessment of your fraud controls and determine who is responsible for fraud detection and reported misconduct. Credit unions should clearly establish this oversight which could be assigned to a senior manager, an internal auditor or the supervisory committee. Basically, this individual or group would perform periodic reviews of employee accounts and other areas where fraud might occur so as to detect and act early if a problem surfaces.

Screen and monitor those who have access to money. A background check on each new employee is a necessity for financial business. Employees who have access to teller drawers, the night depository or cash deliveries, etc., all have the opportunity so this exposure must be controlled. Maintaining dual control on all internal processes involving cash is strongly suggested. Employees in this role should be forced to take vacations and during that time, someone should oversee or check their work, including their personal accounts. An employee involved in fraud will be reluctant to take time off because a substitute employee may quickly discover an employee’s fraudulent scheme.

Conduct basic fraud awareness training. Develop a formal Fraud Policy that is acknowledged and signed annually by each employee. This sets the tone from management as to all expectations on the conduct of employees. This is Awareness 101, and it lets employees know that management is watching. It serves as a detection element in and of itself.

Periodically remind employees to be vigilant. Setting forth an expectation of awareness and the need to report any suspicious activity is critical to early detection. This “whistle blower” policy should be part of your Employee Handbook and should include a defined process of how to report any suspicious activity, and to whom. Also, the policy should strongly prohibit any retaliation for reporting any questionable incidents. Basically, all employees are responsible for preventing and detecting fraud, including “blowing the whistle” if a problem is discovered.

Monitor your vendors. Managing and overseeing your vendors is very important and employees also need to be vigilant and report any questionable activity. Previous history has shown that some employees, especially those who are new, might not be as knowledgeable about what constitutes fraud. For instance, if a new employee receives an invoice, they may likely pay it without as much scrutiny as a more experienced employee. Training and awareness is important and helps to provide early detection.

Credit unions should approach fraud prevention with a critical eye and not take anything for granted. Always take a questioning view to help guide the internal audit process in the utilization of a risk-based analysis and probe broader and deeper into areas warranting closer scrutiny. In other words, if you smell smoke, there is probably a fire burning somewhere.

A regular discussion of known fraud risk factors, management override of internal controls, fraud risk assessments, results of employee surveys or hotline calls, and publicized fraudulent activities from other companies all lead to productive brainstorming sessions among the credit union Management Team, the Internal Auditor and Supervisory Committee. With good communication and teamwork, risk of loss through internal fraud can be minimized.

Allied Solutions is the NAFCU Services Preferred Partner for Insurance—Bond, Creditor Placed (CPI), Guaranteed Auto Protection (GAP), and Mechanical Breakdown (MBP); iSolutions; rateGenius.

For contact info and more educational resources, visit: www.nafcu.org/allied.

Comment on this post.