Human Resources Management Commons^™

Comparative Performance Of Cooperative Equity Retirement Plans, Jeffrey S. Royer

Department of Agricultural Economics: Faculty Publications

This paper compares the performance of revolving fund, percentage-of-all-equities, and base capital plans, and special plans for redeeming equity held by estates or based on member age. It also examines how the performance of the base capital plan is affected by changes in the base period, relaxing the equity requirements for underinvested members, and a variable cash patronage refund program. The base capital plan performs better than other systematic plans but places financial burdens on young members. Two modifications can mitigate that problem with only a slight diminution in performance. Special plans benefit cooperatives operating revolving fund plans the most.