2008 Patronage Payment Frequently Asked Questions and Answers

How is the Patronage payment calculated.

• Your payment is calculated as a percent of interest you earn from the credit union on your investments and of interest you have paid to the credit union on loans, and Lines of Credit.  It is not paid on accounts that have been closed prior to year end and no membership exists, if the account is tendered with the Horizon Credit Union whereby rates and fees have been determine through the tendering process, on Registered Funds (RRSP’s), or to member and non member accounts under Dealer Finance Programs and CU or Mintage Lease programs, or on interest that has been paid to the Horizon Credit Union on overdrafts.
  
  

Why has the Horizon Credit Union deposited the funds into my account and placed restrictions on how I access that money? 

• Horizon Credit Union is growing and progressive in offering full service in all financial products and services.  We have seen some good growth over the past couple of years.  In order to continue to grow and offer current and new products and services we want to ensure we have a strong equity base as we continue into the future. By continuing to pay a portion of our profits back to the members in a retained equity account versus a cash payout, it will allow us to reach the goal of increasing our member’s equity and retained earnings in the credit union to 8% from the current 5.7% as of December 31st, 2008.  This ensures our credit union will sustain any market conditions that may have a negative influence on our business in the future.
   

How and when will I gain access to the money in my Member Patronage Retained Equity Account.  

• Members who are age 70 and over will be paid out their account balance in full each year.  This will be deposited to your chequing account.
• Accounts that involve estate settlement will be paid out in full immediately unless the surviving joint owner requests the account to be retained under the surviving joint account holders name.
• Immediate payouts will be initiated for members closing all accounts and who are leaving Horizon Credit Union’s trading communities.
• Members who close their accounts but remain within the trading community may make application for  payout should the balance in the Member Patronage Equity Program be $500.00 or greater. The payment will be considered and paid after all other payouts are met and will be issued after the current year—end is finalized.  Immediate payouts will be made for  accounts less than $500.00.
• Organizations will have their payments automatically deposited to their accounts in it’s entirety each year.
• Bankruptcy or Revenue Canada demands for payments will be paid out in full, first to Horizon Credit Union indebtedness and secondly through the proper legal channels.
  
  

How much money can I hold in my Member Patronage Retained Equity Account?

• Currently, when a Member Patronage Retained Equity Account reaches $2000.00 all balances allocated in excess of this maximum will be paid out the account holder.
  
  

Does my Member Patronage Retained Equity Account earn interest?

• Interest is not paid on this account at this time.

 
Are the funds in the Member Patronage Retained Equity Account mine or the credit unions?

• Funds held on deposit in the Member Patronage Retained Equity Account are the property of the member, but are subject to the withdrawal conditions as set the Credit Union; in order to protect the reserves of the credit union from being depleted uncontrollably.
   

Do I have to claim the amount that is put in my Member Patronage Retained Equity Account as income for tax purposes?

• Income or money that you are paid or has been deposited to your Member Patronage Retained Equity Account,  that has been earned on your investments with Horizon Credit Union is included in the current years T-5 and therefore is included when you report T5 earnings to Revenue Canada.

Income or money that you are paid or has been deposited to your Member Patronage Retained Equity Account, that has been earned on loans and lines of credit are not included on the T5’s you receive from the credit union and it is your responsibility to report this amount in the proper manner on your tax returns.