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I can’t take the smile off my face!

There are moments when you realize that you really love what you do, or sometimes what you get to do.   A few days before Christmas 2020, I had the 2020 RMS Equity Retirement checks ready to be mailed out. They totaled just over $310,000.  There were some very large checks in the batch, and I thought that I should begin calling individuals to let them know that they have a check coming and to keep an eye on the mailbox and not to let it get mixed in with the junk mail. The individuals that I was calling were member/owners of Rocky Mountain Supply Co-op and the thing they had in common was that they were born in 1949, had turned 71 in 2020 and were operating as individuals under their social security number.  Some of them had been doing business with the co-op long before the Rocky Mountain Supply name came into play in 1999.  They had been building equity for years based on patronage dividends they had earned, and now they were to receive their retirement pay out.

One call in particular stands out. I will respect his privacy and withhold his name, but I can mention that he was about to receive a little over $41,000 in equity and he wasn’t aware of it until I phoned him.  You could feel the excitement coming through the phone as he began with “Are you kidding me?” After I reassured him that I was not, he shared with me that he couldn’t take the smile off his face.  He was going to call his kids and neighbors and tell them what was happening and to tell that they need to keep doing busing with Rocky Mountain Supply and the co-op.
After we hung up, I continued down my list and making similar calls, although none topped the ‘smile’ call.  I shared it with the office and my co-workers bringing a few more smiles.

Early in January 2021, as part of the dual equity plan implemented by the RMS Board, an additional $119,000 was sent out to 1,161 accounts.  This was the equity retirement based on the year in which the stock was earned; regardless if the account was an individual account or a business, corporation, or LLC set up with a federal id number.  This completed the pay out of all equity that was earned prior to 1989.

When the dual equity retirement began in 2018, approximately 50% of the retirement was based on patron age and 50% based on year in which the equity was earned.  Patrons who turned 70 in 2018 received 50% of their equity and received the other half in 2019.  Working with the board, we were able to determine that in 2020 RMS would be able to retire out 100% of the patrons born in 1949.  The retirements will continue to be evaluated on a year-by-year basis.

There are a few important notes regarding equity retirements.  There is no tax liability on the stock/equity retirement check that you receive.  The tax implication occurs in the year in which you received the total dividend. Also, your account with Rocky Mountain Supply is not closed after your equity has been retired out.  Each year going forward, if you continue to earn patronage you will receive it in the form of 100% cash and no stock.  The equity does not build up again and you do not have to worry about retiring it out again.  There is no benefit in leaving the equity in the account as it is not like a traditional stock.  It does not vary in value; it is always based on dollar for dollar and it is to your advantage to have it cashed out once it is available.     

RMS has been able to bolster the co-op’s financial position and the Board of Directors is committed to continue to retire more equity back into the country to you the member / owners.  This will hopefully continue to produce a few more smiles down the road.