There are many benefits to being a member of Rosenort Credit Union including great rates and low services fees. Membership at Rosenort Credit Union also means that you are an owner. Rosenort Credit Union may pay a portion of profits back to member owners in through our Member Equity Plan.
The Articles of Incorporation and By-Laws of the Rosenort Credit Union provide the Board of Directors with the authority to distribute part of the Credit Union's annual net earnings to members as Member Equity.
The purpose of the Member Equity plan is to provide each member with an opportunity to share in the earnings while maintaining the Credit Union's strong equity position.
1. How does the Member Equity Plan work?
After meeting reserve requirements, the Board of Directors may set aside a portion of the earnings for members who have borrowed and saved at Rosenort Credit Union. The allocation is distributed to the members in the form of Surplus Shares, based on their patronage of Credit Union services.
2. What type of accounts qualify for the Member Equity Plan?
Participation in the Member Equity Plan is extended to all borrowing and depositing members. Interest received on deposit accounts as well as interest paid on loans and lines of credit qualify for the calculation of the member equity allocation. Registered plans, such as RRSPs, RRIFs, and NISA are excluded due to government regulation.
3. How much is each member allocated?
Members will be allocated a percentage based on the following: interest paid on loans during the year and interest earned on deposit accounts. The allocation rate will be dependant on the earnings of the Credit Union at year end.
4. Are allocations made each year?
The Board of Directors will decide each year whether earnings warrant an allocation to the Member Equity Plan.
5. Under what circumstances can the member withdraw the funds?
Generally the Surplus Shares which make up the individual Member Equity Plan will not be redeemed by an active member. The Member Equity Plan, like the $5 membership share, would be your vested interest in the operation of the Credit Union. The Board of Directors may declare a general redemption at their discretion.
There are however, special circumstances under which individual consideration will be given to a complete redemption of the member's Surplus Shares: ie: death of a member, bankruptcy, dissolution of a company or organization, when a member reaches age 60.
6. What type of statements are issued and how often?
All participating members recieve an annual notice advising them of the details of the allocation of Surplus Shares. Member Equity is also shown on the monthly member statements.
7. Do Member Equity Plans earn interest?
No interest is paid on Member Equity funds. However, the Board of Directors may allocate dividends to existing surplus shares.
8. Are Member Equity Funds guaranteed?
Member Equity Funds represent true equity, which is considered risk capital, and therefore are not guaranteed.
9. What about income tax?
An allocation to Member Equity based on interest earned on deposit accounts will be taxable. An allocation based on the interest paid on a loan will be taxable only if the loan interest was tax deductible.
10. Do all members participate in the program?
All members paying or receiving interest in a sufficient amount to warrant an allocation of $1 or more will be allocated Surplus Shares. However, no member may hold 10% of the total number of shares issued by the Credit Union.
