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compulsory central provident fund scheme. However, if the
scheme is limited to shorter term benefits (i.e. excludes
retirement, and possibly death, benefits), it would avoid
the political objections referred to above.
15.
Employers generally feel that to be successful,
any contributory scheme must be made compulsory. On the
other hand, a compulsory scheme might undermine the well-
established Public Assistance scheme, under which the poorest
benefit on a non-contributory basis, and might lead to public
accusation that the Government was seeking to reduce public
expenditure by transferring a proportion of Public Assistance
clients to a compulsory contributory scheme.
16.
In weighing up the case for and against a compulsory
scheme, the following considerations are also relevant:
(a)
(b)
(c)
a compulsory scheme would provide the most effective
social security coverage and would simplify the
administration for both employers and the
Government;
since the age structure and numbers of participants
could be determined fairly accurately at the start,
it would enable a choice to be made between
providing higher benefits at the same
contribution levels (2% each side) or the same
benefits at half the contribution rates (1%
each side instead of 2%). This is based on
actuarial advice from GAD;
as with a semi-voluntary scheme, employers would
be permitted to take account of the provisions of
the new scheme in defining the scope of any
employee benefits scheme of their own, if legally
feastb
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/(a)