CIRI shareholders took action in June to create a trust that will promote the health, education and welfare of CIRI’s elder shareholders. The resolution, which passed by a wide margin at the 2003 CIRI Annual Meeting, calls for the establishment of the CIRI Elders’ Settlement Trust.

The CIRI Board of Directors has set aside $16 million to be placed in the Elders’ Settlement Trust. These funds are expected to produce a quarterly distribution for all original shareholders holding at least one share of CIRI stock upon reaching the age of 65.
The Trust is set up so that the distribution should be the same $450 per quarter that eligible shareholders have received under the Elders’ Benefit Program. The quarterly distribution dates will also remain the second Friday of February, May, August and November. Although the Trust is expected to last for approximately 20 years, the actual length will depend on a number of variables, including the performance of its investments.

A trust is a legal arrangement by which trustees hold and manage money or property for the beneficiaries. A settlement trust is a special kind of trust provided for under the Alaska Native Claims Settlement Act, which must be for the purpose of promoting the health, education and welfare of its beneficiaries and preserving the heritage and culture of Alaska Natives. The CIRI Elders’ Settlement Trust is irrevocable and cannot be withdrawn once established, at least until the money is reduced to zero.

ANCSA requires that CIRI’s Board of Directors appoint the trustees, who operate independently of CIRI management. The CIRI Board of Directors appointed the first nine Trustees at their meeting on July 31, 2003. The Trustees are Agnes Brown, Clare Swan, Charles Anderson, Robert Rude, James Simpson, Sophie Minich, Gerald Brown, Peter Hocson and Lillian Lapp. The nine trustees are responsible for managing the Trust’s assets and making distributions. They will manage the Trust’s assets separately from CIRI assets.

The new CIRI Elders’ Settlement Trust replaces the CIRI Elders’ Benefit Program, which has been in effect since May 2000. A key distinction between the new trust and the older program is that the previous program was revocable and could be discontinued at any time by the CIRI Board of Directors. Another significant difference between the Elders’ Settlement Trust and the prior Elders’ Benefit Program is that original shareholders over the age of 65 must own at least one share of CIRI stock to qualify as a beneficiary under the new Elders’ Settlement Trust. What this means is that there is a small number of individuals who qualified for the previous Elders’ Benefit Program but do not qualify for the new Elders’ Settlement Trust, because they have gifted away all of their shares. The Board of Directors voted to continue the Elders’ Benefit Program for this small group of people who had gifted all of their shares before July 31, 2003.

Any original shareholder who gifts away all of his or her shares after July 31, 2003, is no longer eligible to receive any elders’ benefit upon reaching the age of 65. Shareholders are encouraged to review this information before deciding to make a gift. Shareholders must keep at least one share if they wish to receive a distribution from the Elders’ Settlement Trust.
There are favorable tax consequences associated with the new Elders’ Settlement Trust. The Trust will provide beneficiaries with yearly reporting information that explains which, if any, of the distributions issued from the Elders’ Settlement Trust are taxable.

Elders who have been receiving distributions from the Elders’ Benefit Program will receive a letter in the near future containing additional details on the Elders’ Settlement Trust.

“We are very pleased that by voting to implement the Trust, shareholders confirmed the high regard in which the corporation holds its elders,” said Carl Marrs, CIRI President and CEO.