"
Our ref: 6561/1
Your ref: CR 14/5091/77
E P Ho, Esq.
Secretary for Social Services
Government Secretariat
Hong Kong
Dear Mr. Ho,
4
925
RAR
Government Actuary's Department
Steel House, Tothill Street, London SW1H 9LS
Tel: 01-273 4330
HKK 234
RECEIVED IN REGISTRY MO. 51
1 1 MAY 1978
DESK OFFICER
RE: TRY
PA
Action Teken
INDEX
по
8 May 1978.
I was very grateful to you for telephoning me on 29 April and telling me about the position in regard to the proposed contributory benefit scheme. As I told you then, I could almost certainly arrange to come to Hong Kong in July if that were to be the most suitable time. I promised to reply to the detailed points raised in your letter of 10 April, and I will follow the lettering you gave to those points:
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(a) For our calculations on the basis that all employees elected to join
the proposed scheme, we used the numbers and age distribution given by Table 8 of the Hong Kong By-Census 1976 basic tables for employees in the public and private sectors. Mortality rates were taken from the 1976 Hong Kong life tables. The rates of sickness claim were based on British experience and assumed that the proportion of insured employees claiming sickness benefit at any one time would rise from about 2% at the youngest ages to 2% at the oldest ages for men and from about 1% to 21% for women. For calculations based on selective entry we assumed rates at the higher end of these ranges.
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(b) We see no reason why, if employers are not allowed to contract out, they should not be allowed to cut back their existing schemes to take account of the benefits of the State scheme. Presumably in some cases, such as the Civil Service, legislation would be necessary to achieve this; in others, it might be a matter of negotiation between the employer and his employees and their unions. We would also support the proposal that an employer should be allowed to elect to make all his employees members of the scheme. Indeed this would be a useful step on the road towards a universal scheme rather than a voluntary one. As I hope our comments brought out, a voluntary scheme, however necessary it may be for political reasons, does add considerably to the problems of designing · suitable arrangements.
(c) We appreciate the desirability of having a fixed waiting period, though
in view of the unequal length of calendar months 4 weeks might be rather more convenient than one calendar month or 30 days. The latter could give difficulty over week-ends. If this period were adopted, there would be awkward cases where there was a gap between the payments under the Employment Ordinance and those under the new scheme and other where there was an overlap. Some amendment of the Employment Ordinance might be desirable. We would not dissent from your proposal to start with three months' benefit.
Gxactly!