Member Equity Plan
The purpose of the Member Equity Plan is to provide each member with an opportunity to share in earnings while maintaining Strathclair Credit Union’s strong equity position.

To date Strathclair Credit Union has returned $1.30 million to its members in the form of a patronage refund.

The following are commonly asked questions regarding the Member Equity Plan.

How Does The Member Equity Plan Work?
After meeting reserve requirements, the Board of Directors may set aside a portion of earnings for members who have borrowed and saved at Strathclair Credit Union. Allocations are distributed to the members in the form of surplus shares. This ensures a strong equity base for the future of Strathclair Credit Union and also ensures that the members benefit in relation to their patronage of credit union services. 

What Type of Accounts Qualify For The Member Equity Plan?
Strathclair Credit Union will extend participation in the Member Equity Plan to all individual, organizational, and business  members. All interest paid on loans and  earned on deposits would qualify for the calculation of the member equity allocation. RRIFs & TFSAs would be excluded due to government regulations.

How Much Would Each Member Be Allocated?
Members will be allocated a percentage based on the following: interest paid on loans during the year, and interest earned on deposits. This allocation will be credited in the form of surplus shares to individual Member Equity Plans.  The allocation rate will be dependent on the earnings of the credit union at year-end and therefore may vary from year to year. The percentage allocated will vary depending on the business conducted by the member throughout the year.

Would Allocations Be Made Each Year?
The Board of Directors will decide each year whether earnings warrant an allocation to the Member Equity Plan. 

Could A Member Withdraw These Funds, Or Are General Pay Outs Planned?
Generally the surplus shares, which make up the individual Member Equity Plan, will not be redeemable by any active member. The Member Equity Plan, like the $5 membership share, would be your vested interest in the operation of Strathclair Credit Union. The Board of Directors may declare a general redemption at their discretion. Since 2007 the Board of Directors has redeemed all of the surplus shares for member age 65 years and over.

Under What Circumstances Can A Member Withdraw The Funds From the Member Equity Plan? 
There are special circumstances under which individual consideration will be given to a complete redemption of the member’s surplus shares in the Member Equity Plan: Death of a member, bankruptcy, or 5 years after closing accounts with Strathclair Credit Union.

What Type Of Statements Would Be Issued And How Often?
The Member Equity Plan will be shown on the regular monthly members statements, and in this way all participating members will receive notice advising them of the details of the allocation of surplus shares.

Would Member Equity Plans Earn Interest?
There will be no interest paid on Member Equity Plans. However, the Board of Directors may allocate dividends to the existing surplus shares that make up Member Equity Plans on an annual basis, depending on the level of earnings achieved by the credit union.

Would Funds Credited to the Member Equity Plan be Guaranteed?
The Member Equity Plan consists of surplus shares that represent true equity, and therefore will not be guaranteed because they are considered risk capital. It is unlikely that Member Equity Plans will have to be called upon due to our credit union’s strong level of reserves built up from retained earnings, as these reserves have to be depleted first.

What About Income Tax?
An allocation to Member Equity Plan based on interest earned on non-registered savings plans will be taxable. An allocation based on the interest paid on a loan will be taxable only if the loan was for taxable expense, as in the case of a business loan. It will be the responsibility of the member to determine whether that allocation will be taxable and to report it if necessary on their income tax return.

Do All Members Participate In The Program?
All members paying or receiving interest participate in the Member Equity Plan. No member may hold more than 10% of the total number of shares issued by the Credit Union. Certain accounts may be excluded from participation in the allocation under special conditions, such as when tendering, special quotations or when other special pricing arrangements are involved. 

Why Would the Credit Union Not Charge Less On Loans And/Or Pay More On Deposits So That No Earnings Would Be Generated? 
Strathclair Credit Union operates in a constantly changing financial environment and is affected by interest rate changes and other unpredictable changes to income and expenses. It is therefore essential that the credit union build in a margin of safety to be able to handle these fluctuations. The program helps maintain a strong equity position, allowing the membership to share in the earnings of the Strathclair Credit Union. Strathclair Credit Union continues to be a successful profitable financial organization that provides preferred pricing on its services to members along with competitive interest rates to borrowers and depositors. Through the Member Equity Plan, members will have the opportunity to share in part of the profits of the Strathclair Credit Union. Your increasing patronage in deposits and loans increases your participation in the Member Equity Plan.