Coop to Offer Employees New Profit Sharing Plan

All Coop employees with two years experience become eligible today for a new Coop profit sharing and savings plan.

The plan provides for a Coop contribution to a trust fund for each eligible employee, computed on the basis of the prevailing patronage refund percentage rate.

The patronage refund is the rebate given to each member of the Harvard Cooperative Society, a percentage (the patronage refund rate) of the total purchases made by each member during a year.

An employee's profit share is 2 per cent less than the patronage rate times his wages for the year. The Coop's contribution to his savings is ten times the profit share rate times the amount of savings that the employee has already accumulated in the trust throughout the year. The plan is outlined in a summary distributed to Coop employees.

Profit Options

Employees will have the option of placing their entire profit-share contribution in the trust fund or claiming up to 50 per cent of it in cash.

The trust fund's income will be managed by professional investors. The income or loss will be shared by the employees who are trust fund members.

The benefits of the trust will be distributed to the employees upon retirement, disability, death or termination of employment.

Frozen Plans

Phase II prevented earlier implementation of the plan, Milton P. Brown, Filene Professor of Retailing at the Business School and president of the Coop, said yesterday. "For a long time we've wanted to do this," he said. "We were held back by some considerations of the wage and price controls."

"The benefits from this plan depend directly on the profitability of the society," Howard W. Davis, general manager of the Coop, said in a letter to the employees. "Your enthusiastic efforts to improve this profitability will be rewarded with additional contributions to your account in the profit sharing plan."