Common questions
- What is the Scheme?
- Who is Bupa Australia?
- Will the Scheme affect my policy?
- Am I eligible to receive a cash allocation?
- How do I get my cash payment?
- I don't understand how my Estimated Entitlement/Unit allocation was calculated?
- Why is the entitlement I have received different from my Estimated Entitlement?
- I have been a member for more than 30 years, why am I only getting 30 years tenure?
- What are the next steps?
- Will I be taxed on the cash payment I receive?
- When will I receive my cash payment?
- I voted no/I did not vote, will I still get an allocation?
What is the Scheme?
In late December 2007 MBF received an offer from Bupa Australia to combine the businesses of the MBF Group with the Bupa Australia group for $2.41 billion (the Scheme).
After considering a number of options, the MBF Board recommended the Scheme. The Scheme was fully described in the Information Memorandum sent to eligible MBF contributors.
The Scheme has been fully approved and implemented.
Together, the two businesses will create a health insurance group with a national footprint – something MBF has long aspired to achieve – providing an ideal platform for future growth.
Who is Bupa Australia?
Bupa Australia is part of an international health and care group. Bupa Australia Health is strong in Victoria and South Australia through its brands HBA and Mutual Community and its brands have been associated with providing health insurance to Australians for more than 70 years.
The ultimate holding company of the Bupa Group has no shareholders and it is therefore able to reinvest its profits back into its businesses for the benefit of customers.
Will the Scheme affect my policy?
You continue to hold your current MBF policy. MBF believes that Bupa Australia has no intention of reducing any hospital or extras benefits under existing MBF private health insurance policies. See section 3 of the Information Memorandum for more information.
Am I eligible to receive a cash payment?
In order to be eligible to receive a cash allocation under the Scheme you must have held an MBF health insurance policy on 8 November 2007 and that policy must not have been in arrears.
MBF is not permitted by law to offer a financial benefit under the Scheme to anyone other than holders of MBF private health insurance policies. Therefore customers of the MBF Group who do not hold a private health insurance policy issued by MBF including customers of MBF Alliances are not eligible to receive a cash allocation under the Scheme.
How do I get my cash payment?
All payments under the Scheme were made by cheque unless the eligible MBF contributor completed and returned in time a Payment Authority Form with details of their Australian Financial Institution account, in which case the payment was paid directly into that account. If the Payment Authority Form was received after 2 June 2008 for the Entitlement payment or after 1 December 2008 for the Residual Pool payment or was not completed in full the payment was made by cheque.
Entitlement payments were posted to eligible contributors on 30 June. You should have received it by 7 July 2008. Payments representing the balance of the Residual Pool were posted to eligible contributors on 12 January 2009. You should receive your payment from the Residual Pool by 19 January 2009. If you have not received either your Entitlement statement or your Residual Allocation statement by 19 January 2009 please contact the Scheme Hotline on 133 505.
If you are not sure if you completed a Payment Authority Form in time you can check your payment details online at www.mbf.com.au, just follow the Demutualisation link and click on "view your details" button. You can also check here the address details that were used for your Residual Allocation statement.
I don't understand how my Estimated Entitlement/Unit allocation was calculated?
Schedule 3 of the Information Memorandum contains the detailed Allocation Rules and section 5 of the Information Memorandum explains how your Estimate Entitlement/Unit allocation has been calculated. You should read these carefully.
The number of units that have been allocated to you is set out on your Allocation Form. It comprises of two components:
(a) a base allocation which is based on the scale and type of policy you held on 8 November 2007; and
(b) a tenure allocation which takes into account any changes in scale over your tenure.
Why is the Entitlement I have received different from my Estimated Entitlement?
The Estimated Entitlement provided on your Allocation Form was based on an estimated Unit Value of $1.40.
The estimated Unit Value was calculated based on an estimate of the total Units which will be allocated to all Participating Contributors on the Implementation Date.
An estimate of the total number of Units allocated on the Implementation Date was used to allow for any additional Units it was anticipated might need to be allocated as a result of decisions of the Review Committee prior to the Implementation Date.
However on the Implementation Date it was determined that less additional Units than had been estimated were allocated as a result of decisions of the Review Committee. Accordingly the final Unit value was $1.44359379. This amount was multiplied by your Unit allocation and the total was rounded down to the nearest cent to arrive at your final Entitlement.
The statement you received with your Entitlement clearly set out the final Unit value that was used to calculate your Entitlement.
I have been a member for more than 30 years, why am I only getting 30 years tenure?
MBF's first computer system was only installed in October 1976. Data prior to 1976 is only available in hard copy and is not available for all contributors. In order to be fair to all eligible MBF contributors as a whole, the maximum Years of Membership for each Participating Contributor is set at 30 years.
If you want to read more about how your allocation was calculated, please refer to Section 5 of the Information Memorandum and Schedule 3 of the Information Memorandum.
The Allocation Rules which are set out in Schedule 3 and have been developed by MBF to result in an allocation that is fair and reasonable for all Participating Contributors. The development of the allocations involved striking a balance between potentially diverse interests of different groups of Participating Contributors.
Both the Appointed Actuary and the Consulting Actuary have reviewed the Allocation Rules. A summary of their conclusions can be found in Section 1.3 of the Information Memorandum and you can read their entire reports in Schedules 7 and 8 of the Information Memorandum.
The Consulting Actuary is of the opinion that the allocation basis underlying the proposed Allocations Rules is fair and reasonable for Participating Contributors as a whole and should not result in the financial benefit arising from the Scheme, namely the payment of Entitlements, being distributed inequitably between Participating Contributors.
When Participating Contributors voted to approve the Scheme they also approved the Allocation Rules as they are set out in Schedule 3 of the Information Memorandum.
MBF set up a Review Committee to consider requests for review of allocations, however this process did not review the Allocation Rules themselves. In particular, the Review Committee had no ability to change the 30 year maximum tenure allocation.
What are the next steps?
As the balance of the Residual Pool was distributed to Participants on 12 January 2009 and should be received by 19 January 2009, the Scheme is now complete.
Will I be taxed on the cash payment I receive?
Taxation consequences vary for every individual.
The Tax Advice letter and information in the Information Memorandum refers to a press release from the Assistant Treasurer dated 26 February 2008, which is annexed to the Tax Advice letter. The amendments referred to in that press release have now been passed by Parliament and take effect from 1 July 2007.
If you were an Australia resident when the demtualisation of MBF took place on 16 June 2008, the change to the tax law means that any amounts you receive under the Scheme, including any amount you may receive from the residual pool in January 2009, are not subject to income tax and you do not need to include any amount you received under the Scheme when completing your 2007-08 tax return.
If you were not an Australian resident when MBF demutualised on 16 June 2008 the information set out here does not apply to you and you will need to seek your own tax advice or contact the Tax Office directly to understand your individual position.
The ATO had previously a greed to allow you to lodge your 2007-08 tax return without including any capital gain arising from your Entitlement. If you have lodged your tax return without including your cash payment, then there is nothing further you need to do.
If you have lodged your 2007-08 tax return and did include your cash payment you will need to speak to your tax adviser or the ATO about requesting an amendment to your tax return.
The ATO has provided information on its website and you can access this information by clicking here.
When will I receive my cash payment?
If you are a Participating Contributor, MBF dispatched your entitlement on 30 June 2008, this should have been received by 7 July 2008. Your second and final payment under the Scheme, being your share of the balance of the Residual Pool, was dispatched to Participants on 12 January 2009, it should be received by you by 19 January 2009. If you are a Participating Contributor and have not received either your Entitlement or your Residual Allocation by 19 January 2009 please contact the Scheme Hotline on 133 505.
I voted no/I did not vote, will I still get an allocation?
If you are a Participating Contributor, then you will receive an Entitlement, even if you voted 'Against' the Scheme or did not vote at all.
