10 September 2018
For some time now, we have been working on an initiative to reorganise MAS in a way that would allow us to play a much greater role, in partnership with our Members, to support the communities in which we live and work. Over the past two years we have shared this idea with Members through a number of forums and used your ideas to help shape its final form.
This work culminated in a vote by Members at the AGM on the 29th of August 2018 to overwhelmingly support establishment of a Charitable Trust. The Charitable Trust’s purpose is to fund health research, promotion and education in New Zealand. With 88% of votes in support, this is a strong mandate from the membership.
Why are we doing this?
The Board believes there is a greater role MAS can play, working with our Members to contribute to social good within the communities we live and work.
Our vision is for MAS to be a role model in the industry and within business in New Zealand, by putting a focus on health, wellbeing and sustainability in everything we do. We recently changed our investments to adopt socially responsible investing principles because of this.
To hear more about why we’re doing this, you can play our short video.
How will the charity work?
MAS is a mutual, a membership-based organisation, whose Members pay premiums and fees for insurance and investment services. MAS uses any profit it makes to build insurance reserves, and invest in improving products and services for Members while keeping premiums and fees competitive. MAS currently pays income tax on any profit it makes.
MAS’ Board and Management have done extensive due diligence on the proposal. Legal and accounting firms MinterEllisonRuddWatts and Deloitte have provided thorough advice. MAS has also conducted several Member focus groups over the last 12 months, surveyed Members through the communications sent in May, and conducted town hall style meetings across the country in July to receive as much feedback as possible to refine the proposal.
If charitable status is approved, then income tax exemption will apply. This will enable funding for the Charitable Trust. This funding model has been supported by government to date because of the increasingly important role of private sector funders in the charity sector.
The Board believes the greatest impact will be gained by becoming a ‘giving charity’ (not a ‘doing charity’), using philanthropic means to fund worthy initiatives for health research, promotion and education. All applications will be considered by the Charitable Trust Board, including existing charities, not just new initiatives.
Funds in the Charitable Trust will be regularly topped up based on MAS’ annual financial results, which vary from year-to-year. MAS will target increasing distributions to a sustainable level each year (for example, $2 million per annum) to ensure continuity of funding for initiatives over time, particularly those that require multi-year funding cycles.
The Charitable Trust will be governed by an experienced and independent board who will be accountable for choosing initiatives for funding. The Board will call for applications before each funding period, and provide MAS (and through it, Members) with detailed information on the initiatives chosen for funding, and how the funds are used.
Will this impact the insurance premiums I pay as a Member, or MAS’ business?
There will be no changes to your premiums to enable charitable funding. The proposal will be enabled by MAS' tax exemption as a charity. MAS will continue to use its profits to build insurance reserves, invest in improved products and services for Members, and keep premiums and fees competitive.
The proposal will not in any way distract MAS from its core business of providing quality products and services to Members. The Charitable Trust will operate separately from MAS, so that MAS’ core business won’t be disrupted.