Q. How do member shares work? Would they be a viable alternative to a mutual fund?
A. Our members are our owners, and as an owner of a corporation you are a shareholder. ProfitShares is Synergy Credit Union’s member equity program.
How does the program work? ProfitShares is a member benefit, not an investment product. Synergy pays ProfitShares to all our members based on the business they do with us. And how much you receive – if anything – depends on Synergy’s surplus corporate earnings at each year end. The decision as to how much is allocated for ProfitShares is made on an annual basis by your democratically-elected Board of Directors.
Calculation of your ProfitShares allocation is based on the interest you’ve paid us on your loans, the interest we’ve paid you on your savings and term deposits, and a competitive return on your ProfitShares investment (the current balance in your ProfitShares portfolio earns dividends too!).
From its inception in 1983 to December 2008, this exceptional program has returned $53.5 million dollars by allocation to member equity accounts. And cash payouts, although none was declared at the 2008 year end, total over $20.7 million to members through general payouts and various other reasons. When you receive a cash payout the funds are deposited to your chequing account and are yours to spend or invest how you please. As well, you can take out or cash in the ProfitShares equity account itself under set guidelines. If you relocate outside Synergy’s trade area you can apply for payout although there is a waiting period in this circumstance. Seniors at age 69 and over can apply to have their ProfitShares paid out over a 5 year period. Or, pay out will occur upon the death of the account holder.
Your ProfitShares equity account will accumulate over the years as you continue to do your financial business with Synergy Credit Union. Although, accumulations can be substantial, ProfitShares should be considered only as one entity in your overall portfolio. You cannot contribute to your ProfitShares account and it is not a substitute for other investments products.
To ensure you have a flexible, diversified investment portfolio, your financial expert is the best person to speak with to ensure your investments fit your goals, objectives, timelines and risk tolerance. This service is available free of charge at Synergy Credit Union. Call and make your appointment, we’d be pleased to assist you.
