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Charitable assignment

Find out about the charitable assignment process for dealing with any potential windfall conversion benefits.

At the Family Building Society we aim to attract and develop long-term relationships with customers through the competitiveness of our products and the personal nature of our service. We are a mutual organisation, which means that we don’t have external shareholders to pay dividends to. Instead, we return the benefits of our ongoing operations exclusively to you, our members.

We are committed to remaining an independent, mutual building society and we have no plans to change this. We hope that all new members believe that our mutual status is also in their best long term interests. 

However, in the past, there had been a small number of people (sometimes referred to as ‘carpetbaggers’) who opened savings accounts with building societies just in case they were sold or converted to a bank or other company in the future. If this were to happen, members might have become entitled to a payment from the excess reserves of the building society. These payments are also called  ‘windfall conversion benefits’.

    This means a lump sum cash payment or right to acquire shares to which any members who have savings accounts (also called 'shareholding members') might become entitled in the unlikely event that the building society was sold or converted to bank in the future. These cash payments are what carpetbaggers hoped to receive by opening savings accounts with us or other building societies.

    PLEASE NOTE: A windfall conversion benefit is completely separate to and has nothing to do with any winnings from our Windfall Bond prize draws. 
    We require all customers who open one of our savings accounts to sign a declaration agreeing to assign (that is, to sign away the right to) any windfall conversion benefits to which they might become entitled. We will instead give the money to the Charities Aid Foundation. 

    This agreement is called a ‘charitable assignment’ and will last for the first five years someone is a member of our building society. After five years, the charitable assignment declaration will no longer apply and members would get to keep any windfall conversion benefits.

    The charitable assignment declaration is included on all our savings application forms. However, if you already held a savings account or mortgage with us before 14 February 2000, the declaration won't apply to you.  

    We believe that by requiring new members to sign this declaration we will deter carpetbaggers by removing the incentive to open an account solely for the speculative purpose of receiving a windfall. This in turn allows us to provide the service our genuine customers expect and deserve. It also means we don’t need to set artificially high minimum investment levels for our savings accounts to offset the disruptive actions of carpetbaggers. 

    The Charities Aid Foundation is a long established charity and its purpose is to make sure that the process of giving to charity is as effective as possible. 

    The charitable assignment in the declaration on our savings account application forms must be signed by all shareholding members when an account is opened or a name is added to an existing account. 
    There are some exemptions to the obligation to assign windfall benefits to charity. These exemptions may be changed by the Society but not with retrospective effect. The circumstances in which an Individual is currently not bound by the Agreement or is subject to a shorter period of assignment when opening a new share account are listed below. 

    Please note that there are no exemptions for former shareholding or borrowing members who return to open a share account following a break in membership.

    In the list of exemptions:

    • "Agreement" is the agreement to assign windfall benefits to charity;
    • "Start Date" means 14 February 2000;
    • "Pre-Scheme Account" means a share account with the Society which was opened prior to the Start Date;
    • "Post-Scheme Account" means a share account with the Society which was opened on or after the Start Date;
    • and other terms generally have the same meaning as in the Society's Rules.
    An Individual who holds a Pre-Scheme Account will not be bound by the Agreement when opening another share account or becoming a holder of an existing share account, provided that shareholding membership, either individual or joint, has been maintained without break since the Start Date. 

    An Individual who, having previously become bound by an Agreement, opens or becomes a holder of a share account will not be bound by the new Agreement, provided that shareholding membership, either individual or joint, has been maintained without break since he/she entered into the earlier Agreement. The Individual, however, will continue to be bound by the earlier Agreement (unless it has already expired).
    An Individual who is a borrowing member of the Society at the time when he/she opens or becomes a holder of a share account will not be bound by the Agreement. 

    If however, the Individual has previously become bound by an Agreement, he/she will continue to be bound by the earlier Agreement (unless it has already expired).
    An Individual who is the beneficiary of a deceased's estate or a trust comprising a Pre-Scheme Account will not be bound by the Agreement when either the deceased's/trust's share account is transferred into his/her name, or else a new share account is opened by immediate transfer from the deceased's/trust's share account. Where, however, the Individual has previously become bound by an Agreement, he/she will continue to be bound by the earlier Agreement (unless it has already expired).

    An Individual who is the beneficiary of a deceased's estate or a trust comprising a Post-Scheme Account will be bound by the Agreement upon transfer of the deceased's/trust's share account into his/her name or upon the opening of a new share account by immediate transfer from the deceased's/trust's share account but the commencement of the period of the assignment will be backdated to the date on which the Post-Scheme Account was opened.

    The Individual, however, will not be bound by the Agreement if either:

    • he/she is also the holder of a Pre-Scheme Account and has maintained shareholding membership, either individual or joint, without break since before the Start Date; or

    • he/she has previously become bound by an Agreement which pre-dates the opening of the deceased's/trust's share account and he/she has maintained shareholding membership, either individual or joint, since entering into the earlier Agreement, in which case he/she will continue to be bound by earlier Agreement (unless it has already expired).
    An Individual who is added or substituted as a holder of a Pre-Scheme Account held in the names of the executors of a deceased person, or in the names of the trustees of a trust, will not be bound by the Agreement. If, however, the Individual has previously become bound by an Agreement, he/she will continue to be bound by the earlier Agreement (unless it has already expired).

    An Individual who is added or substituted as a holder of a Post-Scheme Account held in the names of the executors or administrators of a deceased person, or in the names of the trustees of a trust will be bound by the Agreement but the commencement of the period of assignment will be backdated to the date on which the Post-Scheme Account was opened.

    The Individual, however, will not be bound by the Agreement if either:

    • he/she is also the holder of a Pre-Scheme Account and has maintained shareholding membership, either individual or joint, without break since before the Start Date;

    • he/she has previously entered into an Agreement which pre-dates the opening of the deceased's/trust's share account and he/she has maintained shareholding membership, either individual or joint, since entering into the earlier Agreement, in which case he/she will continue to be bound by the earlier Agreement (unless it has already expired).

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