A capital credit allocation is the process that is performed to take any positive or negative margins for a calendar year and spread them proportionally to the members during the year the margins occurred. The amount of funds allocated to each member’s account is based on the amount of services the member paid for during the year. Those funds are kept on the Cooperative’s books, until retired (refunded). Capital Credit retirement is the actual process of returning the capital credits back to the members. This process is performed when the Board of Directors determines that the Association is in an appropriate financial position.
