Mutual Benefit Fund - Latest Rule Changes

[mustman]

Just received the latest correspondence from the MBF in regards to the proposed rule changes.

Any one with a larger brain have any issues with the rules that are wanting to be changed? All seems fairly resonable to myself.

[mustman]

Guess no really cares. Not as big as the trustee issue from the other month.

[witwiw]

mustman, haven't seen them. did they come in the post?

[mustman]

Came through the post yesterday. No doubt its on the way.

[Mr.Buzzy]

Is this the rule change that will permit members of other pilot unions to join the MBF?

bbbbbbbbbbbbzzzzzzzzzzzzzzzzzzzz

[paul makin]

In response to Mustman's inquiry I offer the following perspective.

The Directors of Austair (Trustee of the Fund) propose several changes to the rules of the AAPMBF. In the main the changes seek to rectify shortcomings in the rules as presented for change over the past couple of years, but in addition some of the changes seek to subtly entrench the position of the incumbents. An analysis of the significant changes, follows;

Rule 2: Changes to rule 2 are generally not detrimental the membership and are part of a longterm tidying up of the rules. However a subtle and unproclaimed change to rule 2 (a) raises a question as to effect and intent.

The existing rule 2 confers the right to “participate in the fund” the new rule 2 confers a right to “receive benefits to be paid out of the assets of the fund”. Under the existing rules members are paid out of the “income of the fund”, and total payments in any year are confined to the extent of “the income of the fund”. (Rule 8 c and Rule 1 Total Net Income)
Two questions arise from the above: When, if ever, does “income” turn into an “asset” and what happens to the limitation of payouts, to income, with the changed wording?
If income is considered to be an asset and benefits are to be confined to income, then the revised rule should refer to “asset” singular and that asset (income) would need to be defined. As written the rule confers upon the member, a benefit from the entire asset base of the fund, buildings, stocks, bonds etc. As such this change is a radical shift from current, member sanctioned policy, whereby the assets of the fund are protected. If it is intended to change the eligibility of assets for application to benefits, the change in direction should be clearly enunciated. It is the writer’s view that this could be an underhand step in the process of changing the structure of the fund in preparation to sale to a commercial enterprise. If that is not the intent, the rule as presented is another example of the slipshod and incompetent manner in which rules have been amended over the past several years.

Rule 6: Another subtle and unproclaimed change. Rule 6 (b)iii allows the Trustee to require the submission to, non qualified, non medical personnel, private and confidential medical detail. There is no doubt that such information should be submitted to the Fund’s medically qualified advisors for the purpose of determining the veracity and extent of claims, however no argument can, or has, been put, justifying the release of that information to non qualified people. This is an unwarranted intrusion into personal privacy and should not be countenanced.

Rule 14: 14 (c) vi The changes to rule 14 make it significantly harder to remove a non performing Director. This proposal requires that 5% of the members must requisition a ballot and that 50% of those voting will determine the outcome. It is unarguable that this is the most democratic way to deal with the issue. However it is not a practical way. Historically attention to issues is limited to a relative few, who take the time and effort to be informed of detail. Participation rates in non compulsory ballots is generally less than 25%. The bulk of potential voters are apathetic. Assuming a membership of 1700, 85 signatories would be required for the requisition of a dismissal ballot. Given the physical disposition of the membership of the fund, such a figure is extremely difficult to achieve. The Fund has in the past refused requests for access to the membership list to circularise members. Equally the Fund has refused to accept a member sponsored distribution to the general membership. So in that light the achievement of 85 signatures is an unlikely event. We therefore have a proposed rule that ostensibly promotes democracy, which in reality stifles it. The founding fathers of our rule set understood the demographics of our membership and decided on a framework that facilitated the most equitable outcome rather than impeding membership will. It is the writer’s opinion that this is a deliberate move on the part of a clique of Directors to entrench their position.
Rule 14 (c) ix The election of a Chairman of the Board of Directors is effectively confined to those Directors present at the first meeting of Directors subsequent to the AGM of Members. With current attendance histories and quorum requirements, it is conceivable that the chairman’s position could be determined by just 3 Directors, including the nominee. This is hardly an ideal setup for a group professing to be champions of the democratic process.

Rule 21 Once again this rule ostensibly supports the democratic process but in reality stifles it. Thirty days notice is required for the notification of an AGM. Apart from the designated items of business, any additional item must be notified to all the members. There are no rules or procedure in place to disseminate to the membership, any “other business”. Other than at the meeting, the membership at large has no means of “officially” advising the broader membership of matters to be raised. As previously mentioned, the Fund has, in the past, refused to facilitate the dissemination of information to the membership. The proposed rule implies no compulsion upon the Fund to disseminate any requested agenda items. Further it denies the membership the ability to raise any matters that may come to light between the declaration of the agenda, and the meeting date. In the absence of a framework, this rule change serves to further protect the Board from scrutiny. It is the writer’s belief that this is intentional.
**************

A Further development that members should be aware of.
Despite stated undertakings by the Trustees at a previous AGM that they(Trustees) had no intention of selling the building, built for and by the AFAP, as the home for the pilots industrial body, the property at 136 Albert Road South Melbourne was advertised for sale in the Melbourne Age last weekend. This action has been taken without further reference to either the AFAP, or more importantly the owners of the building, you the membership. The rationale will no doubt be that the building is under performing as an investment and the Directors have a fiduciary duty to maximise returns. This is an absolute nonsense. The Directors of the fund have a duty to ensure that the benefits payable to the members can be met. That is the sole purpose of the fund, the welfare of the members. The benefits payable to members are limited to the “income” of the fund. There are provisions within the rules covering payments to the members in the event that “income” is insufficient to cover member benefits. IN THE LAST 20 YEARS (and probably considerably longer) THESE PROVISIONS HAVE NEVER BEEN INVOKED. Income has always been in excess of demand. The sale of the building and conversion to better yielding assets will achieve absolutely nothing for the members in the day to day administration of the fund and members entitlements. It will improve an already excellent balance sheet which will serve to bolster the reputation of the administration of the fund, but the members will gain nothing. What will be lost is a place important to both the on going operation and the history of the organisation (both AAPMBF and AFAP), and a tremendous investment into the future, with the planned development of a rail station within walking distance. There may be from time to time reasonable argument to unload the building but such decision ought properly be an informed decision of all the stakeholders, the current members, the AFAP, and to a degree those past members who had the vision and wisdom to invest in our future. This is not a decision that should be left to a group of 3 retired non-members backed by a self serving Fund Manager, which because of the vagaries of meeting attendances, is essentially what has happened to date.


A vote to support the current rule changes is a vote to support those Directors of Austair who whilst addressing the Annual Convention of the AFAP last Thursday and Friday, spinlessly omitted to inform the assembled members of AAPMBF and AFAP that their heritage was up for sale in the following days newspaper.

SHAMEFUL DECEITFUL and GUTLESS.

Paul Makin

[Capn Bloggs]

heritage??
The flippin joint's falling down! Spineless indeed. As for heritage, I'm not sure I'll ever be using it as a wailing wall. Actually, maybe I should, given the grief it has caused...

When, if ever, does “income” turn into an “asset”
As soon as income (of the assets of the fund) is paid into the fund, unless it is spent, it becomes an asset (if nothing else, part of the cash asset), surely, just like any other managed fund?

The rationale will no doubt be that the building is under performing as an investment and the Directors have a fiduciary duty to maximise returns.
Why don't you find out what the REAL reason is, then get back on here and tell everyone? :=

The sale of the building and conversion to better yielding assets will achieve absolutely nothing for the members in the day to day administration of the fund and members entitlements. It will improve an already excellent balance sheet which will serve to bolster the reputation of the administration of the fund, but the members will gain nothing. My bolding. Say what?!

[mustman]

Paul. Thanks for your response. While people may not agree with what your write, its a good input into the discussion.

As you say not many voters get involved which is sad, but hopefully by bringing the issues out here on a public forum will get some people to put in 30 seconds of their time and vote.

[glekichi]

The new rule 6 also excludes elective surgery. Guess that means laser surgery for eyesight is out.