Friendly Societies' Finance.

Feilding Star, Volume XVII, Issue 75, 25 September 1895, Page 2

Friendly Societies' Finance.

THE NEED FOR RECONSTRUCTION. Mr Mason, Registrar of Friendly Societies, has submitted to the Government a scheme for the reconstruction of the finances of friendly societies upon a sound basis. The Registrar draws attention to the fact that the greater sickness rate at the higher ages and the light mortality in New Zealand cannot fail to produce an increased total sickness after middle life. So long as the sickness benefit is continued throughout life it is probable that the rule which limits the benefit to the members suffering from specific sickness shall not be strictly enforced. This, which means the payment of old age pensions under the guise of sickness benefit, is in England understood to account for a considerable part of the existing deficiencies. Mr Mason urges that all societies should therefore remove this source of danger, and to those who will be left only the chance of insolvency or reconstruction, the adoption of a fixed age at which benefits sha.ll cease is not only necessasy but urgent. Unless some action is taken by the unsound societies, some members will receive their benefit in full while others wiil have to .go unsatisfied. In order that all may be fairly treated, they must accept a compromise however unpalatable, and reconstruct. It is high time, he goes on to say, that societies should cease to enroll members when it is certain they will not be able to keep faith with them. The effects of the adoption of a fixed age at which con r tributions shall cease will be that in som@ societies there will be a surplus, in others solvency, and in the remainder a deficiency. As to the last mentioned there must be further action if they are to become solvent. In cases of there being a surplus, such surplus should be devoted to an old age annuity in connection with which the State might offer an old age annuity, not exceeding £26, on terms. In connection with his proposals, Mr Mason strongly urges the abandonment of the system of uniform subscriptions, at all ages.