Patronage Allocations: One More Way It Pays To Be a Member
At the 2018 Annual General Meeting, Fusion announced $500,000 in patronage allocations to members and $400,000 in cash payouts to members 65 and over.
So, how exactly do patronage allocations work, and how do you get yours?
“A patronage return is one way that credit unions share profits with their members,” says Kelly Brook, Chief Financial Officer, Fusion, “As shareholders, every member of the credit union is entitled to a percentage of the patronage return, in the years when one is warranted.”
As shareholders, every member of the credit union is entitled to a percentage of the patronage return
Each member of Fusion purchases a $25.00 share when they become a member (except youth, whose share costs are covered by Fusion). That share entitles you to a portion of the patronage return. The amount depends on the holdings you have on account.
“The distribution to members is based on their relationship and represents a portion of their interest paid and earned during the past year,” adds Kelly.
For most members, the patronage allocation goes into their surplus share account; it belongs to the member, but remains part of the equity of the Credit Union.
Members can see their specific patronage allocation on their statements. This year, business members will see the change on their account statements near the end of June; personal accounts will likely see it on their July statement. If you receive online bank statements, you can see the balance on the pdf statement.
“Typically, the allocation remains on account for the duration of the membership. But there are exceptions where they are paid out. For example, $400,000 will be used to pay a portion of the balances held by all Fusion members who are over age 65 as of December 31, 2018.”
$400,000 will be used to pay a portion of the balances held by all Fusion members who are over age 65
Catalyst had a policy to distribute patronage payments in cash to members once they reached age 65, Fusion has now adopted to continue this. The Board made the commitment to align these payouts to all Fusion members over 65, over a four-year period.
All Fusion members under 19 years old will also receive cash payments each year that an allocation is declared.
“Patronage allocations is one more way Fusion adds value for members. With interest rates as they are, and regulations changing with respect to Credit Unions keeping assets on their books, the fact that we’re paying out almost $900,000 to members in this first year of amalgamation is pretty exciting.”