Friendly Societies.

Timaru Herald, Volume XIIIC, Issue 13710, 26 September 1908, Page 3 (Supplement)

Friendly Societies.

CONDITION OF THE, FINANCES. STRINGBNtV CRITICISM, The annual return of th« • Registrar ; of Friendly Societies, laid before Parliament,; shows that the. total funds of the sor cieties and branches at December 31 last amounted to £1,118,216, including sick and funeral funds £1,055,477, and medical and management fund £84,739. The average capital per member was £l9 13s. 7d. In Australia, according to a reetura presented, the highest average capital per member is:—Victoria. £l4 13s 6d, with 116,562 members, as againsts3,7s9 members, in New Zealand. The number of members sick ..during 1907. was 10,896. The amount of sickness benefit paid was £58,939. "In last report," says the registrar, "I drew attention to the importance of the close investment of funds, and in th ; s connection an improvement might readily be effected by reducing amounts held on current account in Home districts and lodges. The sums so held are. out of all proportion to requirements, and teeing that the Post Office Savings Bank -is available on special terms for s©eiet r ea, It does not reflect much credit on the part of those responsible that the funds should be deprived.of the interest earnings so necessary to ensure future benefits <o members. I cannot but reiterate the desirability of establishing centralised investment fund*, the benefit of which in those districts where they have been set up are constantly coming under the notice of the Departmentt." The > rar goes on to say : " The trnm tafa ma void) friendly societies ia New Zealand can offer deatii benefit*, compared with the rates asked by institutions doing industrial insurance is not, I think, quite realised bj- member* of societies themselves, and a study of such, comparisons should set friendly vociety leaders thinking as to the practicability of a scheme whereby the ecenamy of th« organisations can be uklu*.d to meet competition." As to the consolidation of benefit funds the Registrar says: —" The great advantages to be derived from the investment of funds alone under this scheme is now considered to more than compensate for any increase in such pay. The management raU» of friendly aociofies is so low that additional checks might be applied ■without greatly increasing the burden of expense. To apyone who studies the statistics of friendly societies in detail and notes the large amounts held on current account uninvested or badly invested by | so many branches of llw various orders it is clearly evident that the beneficent work of th<* societies could b« grcatlv extended were the control of (he**, scat tered finances held by one strong central body for each society." '"The important condition of sound i] nance," continues the Registrar, "is now engaging the- attention of all who are interested in the future of friendly socktj..*., and it is interesting to not* that compar ed with New Zealand, several of tit* Com monwealth StaUw have in jorc« much more drastic legislation, not only applying to future registrations, but to nock-ties already registered. It is doubtful, however, whether tho desired effect can be- attained by at once adopting compulsory measures, ami llie recent disclosure** in a Huitu which ha* mon.i stringent law* mi tim subject than New Zealand are not encoungiuj; to those j wlin «-xj>ec;. complete reform by jxuriug an Art. of Parliament. i "The sovh-t-K* of Now Zealand Ji.»ve j in r«-r«-nt yearn undoubtedly unproved in j lhj*» respect, an«l lh*r«s »v now al , almost ! gej)er.»l dir»ir»« in the leading order* to j take up the. ijut-stton m c.tnjtn,:, .» result I l.trK<Jy du" t<> •hf !f»ort!i of actuarial va. j laatiou and it* undertaking by the Uovern | ment fr«v of charge. societies which ; have improved their j-ofjtoui and adapted i isound *< -*kr. and contributions arc now i entitled to nuch pretention as thn «■*'.».**? ! ran give t)n-fn from competitors who, ; without rejj.tn! to tin* im.in-ma! h.doht:.* : thry ar»* incurring, of!»-r her*' fit*, for which aHcjuaJe provision lijia n«l b<en made," TH" Il»-gi»<rar ai*o rounds .i r."t*- <<i ; warning agaifttt the adoption by fjrc;t',*s ! for high funeral tv-3««ntji. Th» acttiarr. in as intrtyjortjon to i remarks o n tb*> yaimttoßi of xadiridu*!

societies or districts, says:—"When it is stated that there is a deficiency, the meaning is that on a reasonable estimate th& accumulated funds held by the sick and'funeral fund are not sufficient for the purpose. Several old lodges in New Zealand have already arrived at the stage where the outgo for benefit* is in excess of the contribution income. One of these during the last sixteen years has actually paid out in benefits £1875 more than it has received in contributions and yet the claims were practically normal. In another case the excess of outgo was £1969 in sixteen

years." - ' , connection," he adds, 1 would point out that the,effect of the accession of an increasing number .of new members' is generally to merely delay the arriving of the dangerous epoch. Many lodges which are in a bad position show a large increase in the funds, and members are thereby apt to be deluded into the idea. that the lodge is progressing. This increase in the funds is simply <tue to the fact that the money of these members arrives in the lodge before the corresponding liabilities develop fully, and an influx of young members, even at the most inadequate rates, will often cause an. immediate increase in the funds and on appearance of solvency, though in reality the accession of business may be of the most unprofitable character. I find that ill-advised investment of benefit fund money in halls has been a stumbling block* to many lodges, and some lodges are fortunate in following a practice of -allowing large !<ums of money to remain on current account at a Lank, which is, of course, an expensive luxury."