Untitled

Evening Star, Issue 15600, 17 September 1914, Page 1

The thirty-seventh annual report of Mr Hayes, the Registrar of Our Friendly Friendly Societies, preSocieties. sented to Parliament, ' is, as usual, comprehensive and interesting, more especially to members of friendly societies. There -were registered during the past year 22 new societies and branches, distributed among the various Orders as follows M.U.1.0.0.F., 5 lodges; 1.0.0. F., 5 lodges; A.0.F., 2 courts; 1.0. R., 8 tents; isolated friendly societies, 1; especially authorised societies, 1. The Independent Order of Rechabites rcgis-' tered 8 tents, the M.U.L0.0.F. and 1.0.0. F. 5 lodges, and the A.O.F. 2 courts. The number of members at 31st December, 1912, was 73,579 There were admitted by initiation and otherwise 6,812 80,391 Number who died 556 Left by arrears, clearance, etc 6,177 Number of members at 31st December, 1915 73,691 The increase of membership during 1913 was 0.15 per cent., as compared with 2.20 per cent, for 1912, a result not unexpected in a year noted for industrial upheavals. The total funds of the societies and branches as on the 31st December, 1913, amounted to £1,643,177, .made up as follows :—Sick and funeral funds (inclusive of amounts transferred to special funds out of surplus), £1,517,708; medical and

management funds, goods, etc., £125,469. Dividing the total funds by the number of members at the end of the year, it is found the average capital per member is dow £22 6s. The average capital has increased during the last decennial period by £2 10s.

New Zealand stands highest among the friendly societies of Australasia in this respect, ■with £2l 4a 2d per capita at the end of 1912, Victoria coming a bad second, with £ls 6s lOd, South. Australia £l4 16s sd, Queensland £l3 7s, Western Australia £lO lis lOd, Tasmania £9 12s 6d, and. New South Wales £8 13s sd. The number of members sick -was 11,839, equal to 16.70 per 100 members at risk. The sickness experience during 1913 was 107,934 weeks, equal to. nine weeks one day per sick member, and one week three days for each member at risk.

The percentage of members sick was: A.O.F. 16.91, M.U.1.0.0.F. 16.81, U.A.O.D. 16.86. 1.0. R. 16.02, 1.0.0. F. 14.56. Sickness per member : M.U.1.0.0.F. 10.67 weeks, A.O.F. 10.09 weeks, 1.0. R. 8.29 weeks, U.A.O.D. 6.80 weeks, and 1.0.0. F. 6.96 weeks.

The percentage of members sick was for the year, therefore, highest in the A.0.F., while the average sickness per member at risk was highest in the M.U.1.0.0.F. and lowest in the 1.0.0. F. In 1912 the percentage of members, sick was 17.57, the average sickness per member sick was 8.58 weeks, and the average sickness per member at risk 1.51 weeks.

The number of members who died was 523, being 7.38 of each 1,000 members at risk. The number of wives who died was 158, being 2.23 of each 1,000 members at risk.

Tlie amount of siefcness benefit paid was £74,785 in 1913, equal to £6 6s 4d per member sick, and £1 0s 4d per member, a-s against £5 18s 9d' and 19s lid respectively for 1912. Viewing the amount paid in relation to the weeks of sicknesSj the average benefit per week is found to be 13s lOd in 1913, which is the same as 1912. The total worth of the sick and fune-

ral funds of 681 lodges at the beginning of 1913 was £1,380,750, and at the end of th<j year £1,465,159, as compared with 664_ Jodges worth £1,298,437 and £1,383,954 at the beginning and end of 1912; the balance of gain for the year was £84,385, or £1 2s lid per member, in 1913, as compared with £85,517, or £1 3s Bd, in 1912.

The average earning power of the investments credited to the sick and funeral funds' was 495 per cent. (£4 19s), as against £4 19s 2d in 1912.

The consolidation of sick funds of friendly societies is still a burning question with most of the societies in the Dominion, and it is only a question of time when every society will find it is to its advantage to have its benefit funds consolidated under central control. The selfishness of human nature and the shortsightedness of some branches lias hitherto operated against this b'eing accomplished, but as there is every argument in its favor it is'only a matter of time when it will be accomplished. The Registrar has been a strong advocate of this salutary reform, and has a word to say in regard to the administration of consolidated societies. Ibis is only a matter of detail, and we understand that legislation will be introduced during the session to legalise the control of the funds under the altered form of administration. The Registrar says : The process of consolidating the branch benefit funds of societies into one central fund is still occupying the close attention of many societies throughout the Dominion. Sonie of the kgal diffi- ■ culties consequent upon these consolidations are now beginning to show, more particularly the question of controlling the investment of those, funds held in

various parte of the Dominion, and which constitute the assets of the central

fund of the main body. The Friendly Societies Act vests the funds of a society in its trustees, and no separate persons outside thof-e trustees can be legally held responsible for the investment and control of those funds. Any extension of those powers of controlling the funds implies a corresponding extension of the penalising sections of the Act in respect to officers responsible for the safe custody of moneys, securities, etc.; and societies that are effecting these changes would do well to bear in mind this important point when adopting new rules. The Registrar sets out in eitenso a judgment given in the case of a court of Foresters against its central trustees, but as it deals with a method of treating the benefit funds which is not usual with friendly societies it does not seem to us to be of much interest to societies generally. The trouble which has beset this society would have been avoided had it adopted, instead of what seem to be somewhat rule of thumb methods in dealing with its funds, adequate rates of contributions allocated to the various funds by approved actuarial methods of division, which, is the only means by which accuracy and solvency can Lie arrived ai. Mr Hayes next draws attention to " irregular transfer of surplus moneys," and quotes a case where a flagrant breach of section 41-2 of the Friendly Societies Act was attempted, but was frustrated by the action of the department. The Registrar says: Attention is directed to the case for the purpose of intimating to societies that the terms of the Act respecting the transfer or appropriation of surplus benefit moneys must he ,-trictly adhered to. The Registrar quotes at some length from the annual report of the •Commissioners administering the British Insurance Act, showing that the relations which subsist between the ''approved societies over 2,000 in number " which have undertaken National Insurance business to be of the most cordial and satisfactory character. The advantages which were foreseen and have proved to arise from the adoption of this method of administration have been mainly three : First, the initial impetus necessary to secure that a very great number of persons should enter fcjtate insurance by the 15th July, 1912, was gained by using for this purpose the existing machinery of frequent meetings, regular dissemination of information, and übiquitous canvassing, which the societies had in working for private insurance purposes; secondly, the reception of the Act by the insured population was made much more favorable by the association of State insurance with societies created by the people themselves, and inspired by a tradition of forethought, thrift, and financial stability ; thirdly, the State insurance scheme obtained the advantage of operating through bodies which in the course of many years' working had adjusted themselves in an almost infinite variety of details to the need of the many different types of the population who had been enrolled in voluntary insurance. Societies in Australasia do not take kindly to the idea of being associated in any way with the National Insurance schemes. They have come to recognise that there was a necessity for them: that friendly societies were not fulfilling to the fullest extent the functions now undertaken by the Government. None of them had superannuation benefits in active operation. One society had adopted superannuation tables, but had to suspend their

operation in competition with other societies. All of them catered only for ' picked class in the community, and excluded the medically unfit. It was recognised, therefore, that they had no cause of complaint that the Government scheme entered to a modified extent into competition with them. The valuation of five societies was com puted during the year, bringing them up tc 1910. The Actuary records with a sense of appreciation the '' increasing tendency "of the societies to seek actuarial aseist"ance," He. writes:

I am able to state that during the last four years the financial progress of societies from the actuarial point of view has not been retarded by any ol those sudden lauuohings upon unsound schemes or ill-considered financial measures which were formerly such a prolific cause of trouble.

The valuations made during 1913 were based upon the experience of the New Zealand Friendly Societies up to age 70, and upon Sutton's English Sickness Tables and Farr's Healthy English Mortality Tables after that age. Dealing with the New Zealand branch of the M.U.1.0.0.F., we find that the valuation comprises the branches in the following districts:—Auckland, Taranaki. Wanganui, Hawke's Bay, Wellington, Nelson, Marlborough, Motueka, North Westland, Westland, and Ashburton.

At the date of valuation the sick am) funeral funds amounted in all to £354,739, or considerably over one third of a million, and the valuation disclosed the following Tesult : —Stir pluses in solvent lodges, £68,990; deliciencies in deficiency lodges, £39,000; net surplus, £29,990. If the surpluses of £68,990 were assumed to be drawn out and used for other purposes (as will certainly be done with, part of the. amount), the branch would remain in a deficiency of £39,000. This may look a large amount, but it must be rememV»ere«l -t.lia.-t all -ike fig-axes o£ iiifi Wa-nch are large. In point of fact, it represents only a deficiency of lid in the £. On the whole, the position is certainly very good indeed, a result very largely due to the fact that the branch has always insisted upon an adequate scale of contributions. It is quite clear, also, that a steady improvement will be shown in the near future. Of the Auckland district, which was valued as at 31st December, 1910, the Actuary says:— Of the 36 lodges only 11 succeeded in earning more than 4 per cent. or. their funds, 11 more than 3 per cent., and the remainder failed to reach o per cent. The valuation shows that 18 lodges have, deficiencies amounting to £18,184, and 13 have surpluses amounting to £11,900, the net deficiency over the district as a whole being £6,284. That represents a considerable improvement on the preceding valuation, the more so in view of the fact that on this occasion a special addition has been made to the liabilities of mining lodges. _ The outlook for the future is promising.

Of the North Westland district, M.U.. also valued as at 31st December, 1910, the Actuary says : The sickness experience for the pas' three years was unfavorable to th< extent of £537, or about 28 per cent., while during the past 18 years the mortality has agreed very closely with the standard tables, the number of deaths in that period being 56, as against 57 expected. The interest earnings wcr*' good in all excepting two new lodges. Three of the seven lodges earned over 5 per cent., one exceeding 7j per cent. The mean rate earned over the society as a whole was 5.39 per cent. Tlis valuation disclosed deficiencies in sit lodges amounting to £2,185, and a surplus in one lodge amounting to £712, the net deficiency over the society ;i8 •a whole being £1,473.

Of the Taranaki district of Foresters. also valued as at 31st December, 1910, the Actuary writes: — The sickness experience for the quin quennium was favorable to the extent of £3ll, or 6 per cent. The mortality rate for the past 10 years has been very low, the number of deaths in that period being 49, as against 72 expected by the standard tables. All but one court earned an interest rate of over 4 per cent, on their funds. The mean interest earned over the district as n whole was a little over 5 per cent. Th< valuation discloses surpluses in five courts amounting to £4,001, and deficiencies in four courts amounting to £1,483. the net surplus being £2,518. The society shows a marked improvement on the results shown at the previous valuation, and the generally good position is in no small measure due to efficient management. Of the Grand Lodge of the Canterbury district, U.A.O.D. (also valued as at 31st December, 1910), Mr Traversi makes these observations :

The sickness expreience for the quinquennium was favorable to the extent of £925, or 7 per cent., while the mortality for the past 20 years has been low. the deaths in that period being 216, aagainst an expectation of 239 by tinstandard table. Out of the 23 lodgeronly five earned less than 4 per cent. The mean rate over the whole district was over 4| per cent. The valuation discloses deficiencies in 22 lodges amounting to £13,099, a surplus in one lodge amounting to £176, and a, deficiency in the district funeral fund of £5.721, the net deficiency over the district as a whole being '£17,923. Though the deficiency is large, the society has during the last 15 years slowly improved itposition, the rates of solvency being now 17s 2d in the £, as against 15s lid ii 1898. -if this improvement is main tained it will be well. During the quinquennium the- society abolished the special fund which undertook to give special funeral benefits on the notorious equal levy or assessment system, and which was the subject of criticism in my last valuation report. The society ientitlcd to credit for grappling with the problem. The society possesses a fund designed to relieve members of their contributions after age 70, but the funr? promises a great deal more than it i; constructed to perform.

One pleasing feature of the report i: that the valuations computed during tin year under review show a very muct improved state of matters from forrnei valuations. Leaders of friendly societie: are recognising at last that in order to ensure the solvency and permanency ot their institutions they musA adopt actuarial and business-like methods. High rates of interest a,nd abnormal secessions do not now form the factors in the valuations they one time did. The only road to success is by way of adequate rates o' contributions and up-to-date methods o; management, It is very gratifying thai the shocking examples which at one time formed a feature of the valuation reports are being gradually eliminated, and are being replaced by * improved methods of .administration. The eduaational assistance of the Registrar's department Is largely responsible for this. It is also pleasing to record that the improvement is being brought about by natural process, and not by drastic legislation.

If bright, blue eyes and rosy lips Dark shadows hide behind, And all the pleasures that one sips No longer please the mind. When influenza grips amain Then seek out fortune—woo her. She'll make the blue eyes bright again With Woods' Great Peppermint Cur». —£Advtj