Profit $haring Program FAQs

Q1. Why have you introduced a Common Share redemption program? Expand/Collapse

Lakeland Credit Union has one of the most generous loyalty programs available in our industry and certainly within the retail market place. Yet, the perceived value is limited due to complexity of the program. The changes we've made are intended to position the program to become:

  • Easier to understand
  • More relevant and meaningful
  • More tangible
  • More accessible

Q2. Why aren't my profit shares paid in cash? Expand/Collapse

Any successful company must put retained earnings aside to ensure long term success and stability. Rather than accumulate all of our long term capital in a general pool, we allocate portions in our individual members' names based on the level of contributions they've made to our success that year. This means that each member truly owns a portion of our "rainy day fund", but as the name implies, these funds are intended for the longer term and therefore withdrawal restrictions are applied.

Q3. Under what circumstances can I cash in my common shares? Expand/Collapse

  • 15% of your common share balance, once per year
  • For the portion over $10,000 (processed automatically)
  • For business/associations, upon dissolution
  • If moving from the Lakeland region (and closing account)
  • When the member reaches age 65
  • Upon death of the member

Q4. What if none of the above apply and I want to close my accounts? Expand/Collapse

You will need to wait 6 months from the date of closing your account to receive your common shares. (Except for balances less than $500 which may be redeemed upon closing).

Q5. Why has the dividend rate decreased in the last few years? Expand/Collapse

Several years ago, when the dividend rate was 7%, prime was above 6%. Prime is now 3.20%. The Board strives to declare a dividend rate between 1.5% to 2.0% above the average 5 year term deposit rate.

Q6. Why so many different patronage bonuses and rebates? Expand/Collapse

The more business you have with LCU, the more you contribute to our success, the more you share in our profits.

Q7. Should I withdraw the funds that I invested several years ago? Expand/Collapse

We are very appreciative of the trust that members placed in our organization several years ago by investing their at risk funds up to $10,000. These helped us get through a difficult growth period. We continue to pay a "premium" dividend rate on these funds, and encourage members to leave these investments with us. Withdrawals are subject to the conditions noted above.

Q8. Will I pay tax on my cash back withdrawal? Expand/Collapse

No. Some of the rebates, bonuses, dividends are taxable at the time of earning them and would have been reported on your T5. Your common share balances is therefore "after tax" dollars.

Q9. Why do I only have one share account now? Expand/Collapse

In an effort to appeal to members concerns regarding their multiple common share accounts, we have consolidated them and are issuing annual statements at year end. This will help us to make sure EVERY member is given "their share" properly and accurately.

Q10. Why are my shares being paid into my husband/co-signer's account? Expand/Collapse

Due to each member having their own member share account now, the patronage for jointly owned accounts is paid into the share account of the person who is named first. If changes are required, the person receiving the patronage should come to us and we can make any changes that are required.

Q11. How come my share account is missing from my statement? Expand/Collapse

An annual statement will be issued, where all the information will be clearly outlined.

Q12. Where did all my money go that was in my share account? Expand/Collapse

If members had joint common shares, as well as individual common shares, the joint share account was split between owners. Going forward, all patronage will be paid to the person named first on the account.
 

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