Terms and Definitions: The following terms and definitions are subject to TCT’s bylaws which state, the Board shall determine that the financial condition of the Cooperative will not be impaired.
General Retirement – A retirement is the amount members receive back as a capital credits refund. It is a percentage of the member’s total capital credits balance. The percentage to retire is decided upon annually, based upon the financial needs of the cooperative.
Allocation – Allocation is the money added to the capital credits account of the members who have an active landline telephone service for a specific year. The allocation amount is determined by company profits, which change every year.
Capital Credits Discount program – A voluntary program that eligible members may choose to participate in to receive their capital credits at a discounted amount.
Distribution – Distribution is the Board approved payout for a portion or percentage of the capital credits that have been earned by members.
Estate Retirement – The retirement of an estate is the disbursement of all remaining capital credits accumulation of the member to the member’s estate. Estates will only be retired in full if the Board deems that the retirement of the estate will not financially impair the cooperative.
CAPITAL CREDITS | FREQUENTLY ASKED QUESTIONS
Why can’t I have my capital credits now?
Capital credits are used to finance capital improvement and expansion needs before applying for additional loans and paying interest on those borrowed funds. Improvement and expansion may include fiber optics, software, ONT’s, servers, electronics, vehicles, plows or other equipment that provide service. Capital credits are used appropriately to keep the cost of services as low as possible while maintaining a high quality of service.
Who makes the decision to refund?
The decision to make a refund is made by the Board of TCT on an annual basis and is based upon the financial condition of the cooperative.
What happens to the capital credits of members who move out of the service area?
Capital credits assigned to members will remain in their name whether they are a current member or not. However, if they fail to maintain a current address and appropriate attempts to refund are returned as undeliverable, the capital credits associated with that refund are forfeited.
Can members use their capital credits to pay their bill?
No, however any outstanding bad debt owed to TCT will be paid prior to the member receiving payment of their capital credits.
What happens to capital credits if a member dies?
If a member, or former member dies, any remaining capital credits accumulation is a part of their estate and can be assigned to their heirs or beneficiaries. Estates will only be retired in full if the Board deems that the retirement of the estate will not financially impair the cooperative.
How do I apply for the capital credits of a deceased member?
In the case of a single membership, all capital credits are payable to the estate at the time of death. The administrator of the estate should report the death to the business office by calling 800-362-2576. In case of a joint membership, a change in the membership name must be made to ensure future capital credits can be paid to the surviving spouse/member.
What happens if a business dissolves?
Capital Credits can be paid out once approved by the Board, however the cooperative must receive proof that the Tax ID number of the business has been returned to the IRS. In the event the businesses is a sole proprietorship, using the owner’s social security number, the capital credits may be transferred to the member’s personal account.
Are capital credits considered taxable?
Members are advised to consult their tax attorney.
What happens in case of divorce?
Capital credits checks are made payable to the member whose name is on the membership account, regardless of who pays the bill. If the situation is otherwise, TCT must be notified and provided with supporting documentation (i.e. a divorce decree or court order) as to how the capital credits should be divided. Capital credits retirement in these cases are still subject to standard capital credits payout criteria.
CAPITAL CREDITS DISCOUNT PROGRAM | FREQUENTLY ASKED QUESTIONS
Capital Credits Discount program – A voluntary program that eligible members may choose to participate in to receive their capital credits at a discounted amount.
How will members know if they are eligible for participation in the discount program?
The Board will make an annual decision, based on the company’s financial condition, who will be eligible to participate in the capital credits discount program. Members will be notified by mail if they are eligible.
How do members apply to participate in the discount program?
Members who are eligible to participate in the capital credits discount program will receive an application form, along with their notification of eligibility. If a member loses the application form they may contact TCT to request another application form. There will be a deadline to submit the application.
When will eligible members receive their discounted capital credits, once they have applied?
Applications will be paid upon the order they are received. Payments will be distributed based upon the amount the Board deems financially prudent each year. If that amount is exhausted before all applications are paid those applications will carry over into the following year for payment, in the order they were submitted.
Do members have to apply for the discount program each year?
No, once a member applies their application is in line for payment.
If a member declines participation, will they be able to participate at a later time?
If a member declines to participate in the year they receive a letter of eligibility they will not have the opportunity to participate for that particular year again. It is possible based on future eligibility requirements that they may be eligible to participate in a different year, but there is no guarantee they will have the opportunity to participate in the future.
What if a member changes their mind about applying for the discount program after they have submitted their application?
Once an application is submitted it is considered a contract and may not be withdrawn.
Do eligible members have to participate in the discount program?
No, participation is completely optional.
What happens if an eligible member chooses not to participate in the discount program?
There is no penalty for choosing not to participate. The member will continue to receive capital credits allocations, as before. In the event of their death their estate will be paid, if the Board deems that the retirement of the estate will not financially impair the cooperative.
What happens to a member’s capital credits earned after they receive their discounted capital credits payment?
The member’s account will be treated as if they are a new member.
Do other cooperatives offer discount programs?
Yes, many other telecom and electric cooperatives offer discount programs.
How do members benefit from participating in the discount program?
Members benefit by gaining access to their capital credits funds sooner, rather than leaving them to their heirs.