A trust is a legal arrangement by which the trustees hold and manage money for the beneficiaries. The Alaska Native Claims Settlement Act allows for the establishment of a special kind of trust, called a “settlement trust,” provided that the trust is established for the purpose of promoting the health, education and welfare of its beneficiaries and preserving the heritage and culture of Alaska Natives.
A resolution calling for the establishment of an Elders’ settlement trust was passed by a wide margin of CIRI shareholders at the company’s 2003 Annual Meeting. CIRI’s Irrevocable Elders’ Settlement Trust was established shortly thereafter with $16 million the CIRI Board of Directors had set aside for that purpose. The Trust mandates $450 quarterly distributions per eligible Elder so long as the Trust has assets available to make distributions. In accordance with ANCSA, CIRI’s Board of Directors appoints the trustees, who are responsible for managing the Trust’s assets and making distributions. At the time of establishment, it was anticipated that the Trust would last for approximately 20 years; however, there is no guarantee it will last that long. The actual length is dependent on a number of variables, including the performance of its investments.
Original shareholders who are 65 years of age or older, own at least one share of CIRI stock and are alive on the distribution date of record are eligible to receive Elders’ Trust payments. CIRI shareholders who are turning 65 and want to receive the payments do not need to do anything other than to keep a current mailing address with CIRI Shareholder Relations. Because receiving Elders’ benefits may cause some Elders to exceed income or asset limits for certain federal or federally-assisted welfare programs, shortly before each distribution newly eligible Elders are sent a letter giving them an an opportunity to “opt-out” of the Trust. Shareholders who elect to opt-out are eligible to opt back in, so long as they still own at least one share of CIRI stock; however, Elders opting out are not eligible to received missed back payments.
The Elders’ Trust payment schedule is determined by the trustees on an annual basis and announced in the CIRI newsletter, on this Web site and on the dividend hotline at 263-5100 or toll-free at 800-764-2435. Payment dates are typically set for the second Fridays of March, June, September and December, the same months as CIRI’s quarterly dividend payments. This schedule reduces the number of months that some Elders lose their SSI payments because of monthly income limitations set by the Social Security Administration.
CIRI’s Irrevocable Elders’ Settlement Trust replaced the CIRI Elders’ Benefit Program, which was implemented in May 2000. A key distinction between the Trust and the Benefit Program is that the Benefit Program was revocable, and could be discontinued at any time by the CIRI Board of Directors, whereas the Trust is irrevocable and cannot be discontinued until the money is reduced to zero, nor can the proceeds be withdrawn by CIRI for any reason. Another difference is the requirement that beneficiaries must own at least one share of CIRI stock to receive Elders’ Trust payments. This requirement meant that a small number of individuals who qualified for the Elders’ Benefit Program did not qualify for the Elders’ Trust because they had gifted away all of their shares. Consequently, the CIRI Board voted to continue the Elders’ Benefit Program for a small group of people who had gifted all of their shares away before July 31, 2003. Original shareholders who gift away all of their CIRI shares after July 31, 2003, are no longer eligible to receive Elders’ payments upon reaching the age of 65. Shareholders are encouraged to carefully consider this before deciding to make a gift, and to keep at least one share if they wish to receive Elders’ payments.
Portions of the Elders’ payments are taxable. Because the taxable portion may vary from year to year, beneficiaries are provided with yearly reporting information that explains which, if any, of the Elders’ distributions are taxable.