As a USAA member I receive Subscriber Savings Account (SSA) statements and distributions every year, but I’ve always wondered what the purpose of the SSA was and how the Subscriber’s Account distributions were calculated. In fact, the USAA Subscriber Account Distribution for 2019 was higher than in past years.
What is The USAA Subscriber’s Savings Account?
The USAA Subscriber’s Savings Account is an account held by USAA in the member’s name where capital is held. Since USAA is a member-owned company a portion of USAA’s capital is held in each member’s Subscriber’s Account. The funds in these accounts held USAA to do the following:
- Satisfy legal and regulatory requirements
- Support current and future operations
- Pay for significant unexpected loss due to member claims occurring from catastrophes
Based on the amount of income USAA earns during the year, the board of directors may allocate funds to a member’s Subscriber Account. The amount depends on the members existing account balance and the amount of auto and property insurance premiums that the member paid during the year.
The account is not like a bank account as you cannot make deposits or withdrawals, or borrow against its balance. The account remains in effect for as long as you have at least one USAA auto or property policy.
What is a USAA Subscriber’s Account Distribution?
The USAA board of directors may authorize a Subscriber’s Account distribution annually. The distribution is a portion of the Subscriber’s Account balance paid out to the member. Below is my Subscriber’s Savings Account Distribution for 2019. As you can see it shows your Year-End Balance, the distribution made for that year, the allocation that was credited to your account and the final year-end balance in your USAA Subscriber’s account. You can expect to receive this statement in mid February each year. I received my Subscriber account statement on February 18, 2020.
Is The USAA Subscriber Savings Account Distribution Taxable?
The subscriber savings account distribution and senior bonus are considered a return of premium (insurance premium), and not income. Therefore both distributions are not taxable from a federal and state income tax perspective. You will not receive a IRS form 1099 for these distributions.
How is The USAA Subscriber Savings Account Distribution Calculated?
A number of factors are considered before the board of directors makes a decision to distribute funds from the Subscriber’s Account. Some of these factors include:
- Regulatory requirements
- Financial requirements of the association
- USAA investment portfolio performance
- Operational performance
The actual calculation of the distribution is not disclosed by USAA, but it is generally understood to be a percent of your outstanding Subscriber’s Savings Account balance. For instance, if the board of directors authorizes a 4% distribution for the current year, and your SSA balance is $1,000, you will receive a distribution of $40 that year. Of course, the distribution percentage will vary each year, but historically it appears to range from 3-7%.
Keep in mind that the “distribution” is different than an “allocation.” The allocation is a sum that is added to your Subscriber Savings Account each year, whereas the distribution is a sum that is paid out as cash to the USAA member.
How Do I Get My USAA Subscriber’s Account Distribution?
USAA has multiple ways for you to receive your SSA distribution:
- Apply your distribution to your USAA auto and property insurance bill
- Receive your distribution in your USAA Federal Savings Bank checking or savings account
- Receive your distribution in your USAA mutual fund
- Receive your distribution in a non-USAA checking or savings account
To change your distribution payment contact USAA customer service.
How Do I Find My USAA Subscriber Savings Account Distribution?
To locate your USAA subscriber account distribution for 2019 you need to do the following:
- Log into your USAA Account
- Click on “My Tools” at the top of the page
- Select “View My Documents” which is circled below
- Locate the document titled “Subscribers Account Annual Statement (PDF)
Once you download the statement, your distribution amount for 2019 will be on the second line of the account statement. This is the amount that was sent to the account (e.g. checking, savings, etc.) that you selected for the distribution to be deposited in.
What is the USAA Senior Bonus?
The USAA senior bonus is a distribution to the Subscriber’s Savings Account for members with 40 years or more of membership. This is an option where members can receive up to 10% of their accumulated Subscriber Savings Account every year. One option that some take is to apply the USAA Senior Bonus to their homeowner’s insurance policy premium, or auto insurance policy premium. If you would like to receive your USAA Senior Bonus, you must call USAA at 800-531-3027 to request the bonus be paid out.