Estate Retirement

Estate Retirement

Capital credits are the primary source of equity for most cooperatives. Allocating and retiring capital credits are two practices that make cooperatives different from other businesses.

As a cooperative, Codington-Clark Electric Co-op annually return margins (income minus expenses) to the patrons by allocating capital credits for the most recent year and if financial conditions permit, by retiring (refunding) allocations from prior years. Capital credits reflect each member's ownership in the cooperative. We keep record of each member's patronage and capital credit account balance.

To facilitate the settlement of estates, the Cooperative may retire capital credits of deceased patrons or former patrons; provided, the legal representative of the estate submits to the Cooperative a written request to retire the capital credited to the decedent and the Cooperative’s board of directors approves such written request.

Recognizing the time value of money and using present value of money justification, the Cooperative will discount estate settlements, coincident with the date of the request for the estate settlement retirement.

A discount rate of 5% shall be used to calculate the present value of the total amount of capital allocated to the decedent.

The discount rate shall be reviewed periodically and be based on the Cooperative’s weighted cost of capital reflecting the cost of both debt and equity.

Whenever the retirement of capital credits is authorized by the board, the Cooperative shall first deduct from the amount authorized payable to a patron, the amount of any debts or obligations owing from the patron to the Cooperative.

Members who discontinue service shall not be entitled, by virtue of termination of service, to an immediate capital credit refund. The capital allocated to any patron's account shall be paid only at the time the Cooperative is making a retirement in accordance with the Cooperative’s bylaws.

For questions or further information, contact the Co-op's business office.

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