§ 26605 Excess Earnings Distribution Rules

• •If the plan makes more money than needed to pay everyone the minimum interest and cover costs, the extra money can be shared.
• •The board decides how much extra money to add to a special savings account (Gain and Loss Reserve) first.
• •After that, the board can choose to give some of the extra money to employees and employers as a bonus.
• •This bonus is only given if the plan does really well and there’s money left over.

Imagine your school’s savings club makes more money than expected in a year. After paying everyone the promised interest and covering club costs, there’s extra money left.

The club leaders can decide to save some of the extra money for future years (like a rainy-day fund) and then give the rest as a bonus to all the members.