Merged: AFAP and the Mutual Benefit Fund
Just read the latest missives from the AFAP and WR. I have to say there appears to be some selective arguing going on here.
When the Conflict of Interest issue was raised years ago, WR would know, but did not mention in his letter, that MC immediately quit his AFAP post. For WR to use MC's example as "it's OK to have a foot in both camps" without also mentioning Mike's action is a little disingenuous, I think. I note that TS also takes up this point in his memo of the 29th of July. He wrote “MC, as one example, was both for many years and did not find it an issue during those years when he was a Federation officer”, but also fails to point out that MC immediately resigned from his AFAP position when the conflict of interest issue came up.
My understanding is that, even though the AFAP started the MBF, many many years ago, the MBF was split off into it's own organisation (it is, after all, the Australian Air Pilots MBF, not the AFAP MBF). Obviously, the AFAP and/or MBF management (of which WR was one, according to his letter) at the time saw that a conflict of interest could potentially develop between the two, with the (especially now) significant monetary assets in the MBF possibly being compromised. Why is he now spreading doom and gloom just because the current MBF trustees simply want to return the situation to the status quo that existed prior to 2007 when the AFAP was not the trustee/custodian?
The reality is that there is no linkage between the AFAP and the MBF save the fact that you have to be a member of the AFAP to be a member of the MBF, which is enshrined in the rules. The AFAP never had any "control" over the MBF until it (the AFAP) was granted "trustee/custodian" status (the term “custodian” is the one used for this situation in financial circles) in 2007, and then only to facilitate the MBF being covered by the AFAP's simplified Financial Services Regulations arrangements. Any thinking person would agree that the MBF trustees were not handing over the reins of the MBF. Now that the MBF trustees have decided that the previous arrangement is no longer necessary, fierce resistance is coming from the AFAP. While the AFAP (BM, TS and WR) are arguing that they don’t want control over the fund, they are fighting tooth and nail to derail the MBF trustees and their plan to return the MBF to the status quo of 2007, when the AFAP had absolutely no control over the MBF.
Contrary to TS’s claim in his memo that dual appointments have been beneficial, in my view, there is an obvious potential conflict of interest. WR’s statement “a vote in favour of change …will end a tradition” needs further explanation. Is he implying that a principal officer of the AFAP will never have a conflict of interest being a trustee of the MBF, arguably a completely different organisation with no common function? I cannot see any beneficial argument for allowing AFAP principal officers to be trustees of the MBF. On the contrary, I can clearly see an argument for disallowing such an arrangement. Say for example there were a number of AFAP principal officers voted into MBF trustee positions. It is not hard to see a scenario where the MBF’s assets could be manipulated to suit the needs of the AFAP, which may not be in the best interests of the MBF member’s LOL facility. There needs to be an absolutely clear gap between both organisations and the proposed rule preventing dual roles is a fair one, in my view.
BM's letter of the 28th of July carries the same theme. The AFAP, at the MBF's request, was made trustee/custodian of the MBF. Then, suddenly, the AFAP has started demanding all manner of info about how the MBF is being run, in particular what the story was with Austair (which I’m sure WR could have filled him in on), urging a NO vote to stop a return to the pre-2007 situation.
As for the competence and integrity of the trustees running the MBF, the financial state of the fund speaks for itself. Under the stewardship of HO, admin processes and controls have been tightened significantly over previous “arrangements” and above all, the financial health of the fund is stunning compared with almost all other investment funds, again due to HO’s steerage. So much so that the benefit amounts have been increased. To imply that the MBF trustees are engaging in some sort of skullduggery without the best interests of the members at heart is unfair, unjustified scaremongering.
Perhaps the question that really needs to be asked is why, when it didn’t even initiate the transfer of trusteeship to it a couple of years ago, the AFAP is now so vociferous in it’s opposition to relinquishing it? In his memo, TS quotes HO as saying “[the AFAP] required control over the assets of the fund and legal title”. For HO to say such as thing, given all he has done to improve the running and performance of the MBF, alarm bells should be ringing among MBF members.
It is seems to me that the MBF trustees are doing the right thing here. They obviously have major concerns about the current arrangements and want to change them back to the previous setup. It’s a shame the communication to explain the situation isn’t better.
I say vote Yes.