AIR MAIL
See 46
Our Ref: CR 14/5091/77
HKK 234/1
RECEIVED IN REGISTRY NO.
20 APR 1973
DESK OFFICER
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¤ÄNMENT SECRETARIAT.
HONG KONG.
10 April 1978
Dear Mr. Martin,
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129
Thank you for your letter of 14 February 1978, forwarding a copy of your draft report on the proposed voluntary contributory benefit scheme. We have considered it against the background of public response to the Green Paper on Social Security Development, and should be greteful for clarification and further advice on the following points:
(a) We note your comment that, in view of uncertainties
of the age distribution of those who opt to join the scheme, and of the incidence of sickness claims, it has proved difficult to estimate the cost of the proposed benefits. Nevertheless, you have concluded that sickness benefit (of half the average monthly pay in the 12 months preceding sickness) could be payable during the second, third and fourth months of sickness, possibly even the fifth and sixth months, plus & death benefit of six months' pay, on the basis of a 2% contribution from employers.
We would like to know the assumptions which you have used in your costings, as to the number and age of participants, rates of sickness and death claims, etc.
(b)
Contracting-out: We appreciate the force of your
comments on the administrative
This
complexities of allowing contracting-out. concern is shared by local employers. We have therefore concluded that, on balance, it would be preferable not to allow contracting-out. If possible, we would like to allow employers the right to adjust benefits payable under existing
rivate schemes to take account of their additional commitments under the centrally administered voluntary contributory scheme, since we sae no justification for compelling employers to pay more. This applies particularly to the Civil Service, where benefits are already generous.
We also propose to permit an employer to elect to enter all his employees in the scheme, if he paid their contributions. Thereafter, the employee, like any other voluntary member (except that he cannot withdraw while in that employment) would
/carry
L.V. Martin, Esq.,
Government Actuary's Department, Steel House,
Tothill Street,
London, SW1H 9LS,
England.