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Capital Credit Retirement
Capital Credit Retirement Overview
Over time SVEC will pay the member back their contribution into the cooperative. This process is done on a rotation and takes 30 years on average. This process is commonly referred to as the Capital Credit Retirement. Each year the Board of Trustees assesses the financial condition of the cooperative to determine if the cooperative is in a position to pay back a portion of the ownership stake past and current members have in the cooperative.
When SVEC makes the yearly retirement to past and current members, a larger portion of the retirement is given back to the older ownership stakes and the rest of the retirement is spread across all other years, excluding the most recent past five years. SVEC requires the ownership stake to be vested for five years before being eligible for retirement.
If the member has a current account with SVEC the retirement will be applied to the active account with SVEC. If the member no longer has an active account with SVEC and the retirement is $5.00 or greater a check will be sent to the most recent address on file with the cooperative.
SVEC’s residential members do not need to report payments of retired capital credits as income when they file their taxes. Commercial members, however. should consult their tax adviser regarding the taxable nature of their capital credits.