wASIAN NEWS SHEET

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INTERNATIONAL SOCIAL SECURITY ASSOCIATION
w
ASIAN
NEWS SHEET
Vol. VII
No.
I
J"a, lg77
PUBLISHED BY
THE REGIONAL OFFICE EOR ASIA AND OCEANIA
OF THE ISSA, NEW DELHI, INDIA
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Seasonts Greetings
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On Behalf af thg President
and the General Secretafiat of the ISSA,
I Wish You A Happy New Year
I
ASIAN NEWS SHEBT
Vol.
Vil
No.
I
Jat
1977
CONTENTS
Page
INTRODUCTION
REGIONAL ACTIVITIES
Mission of the Regional Director to Turkey and Iran
Survey on Work Injury Programmes in countries in Asia and Oceania
SOCIAL SECURITY NEWS
AUSTRALIA
Department of Social Security
Highlights-1975-76
INDIA
Employees' Provident Fund
l0
Employees' Deposit-Linked Insurance Scheme 1976
Assam Tea Plantations Provident Fund
Provident Fund and Pension Scheme
u
IRAN
Social Security Organlsation
t2
Manpower Development and Current related programmes
MALAYSIA
Social Security Organisation
l5
Recent Developments in Social Security
PHILIPPINES
Social Security System
t6
Service Loans under the Philippines Social Security Programme
SYRIA
Social Insurance Institution
t8
Amendments to the Social Security Code
TURKEY
Social Insurance Organisation for the Self-employed (BAG-KUR)
Old age, Invalidity and Survivors' Pension for the self-employed
l9
TSSA NEWS
Fourth Regional Conference for Asia and Oceania
Meetings of ISSA Permanent Committees in Geneva
Meelings of ISSA Committees in Stockholm
Meetiogs of ISSA Permanent Committees in Vienna
22
22
23
24
ILO NEWS
The Cost of Social Security, 1967-71
26
APPOINTMENTS
27
ISSA CORRESPONDENTS
27
BOOKS AND PUBLICATIONS RECEIVED
27
The International Sociat Security Association is an agtonomous organisation with which the International Labour Office
oodperat€s by furnishing secretarial scrvioes. The publications of the ISSA, which are edited by its General
Sccretariat, are issued on the responsibility of the Association.
INTRODUCTION
The Permanent Technical Committees of the International Social Security Association which met
in Geneva, Stockholm and Vienna in October - November 1976, considered, in depth, several topical
problems in the administration of social security programmes. The emphasis was largely on the socioeconomic aspects of the provision of benefits. The Permanent Committee on Unemployment Insurance
considered measures to prevent unemployment; the Committee on Organisation and Methods studied the
role of public relations; the Committee on Old-age and Invalidity Insurance considered the financial,
economic and social consequences of lowering the retirementage; and the Committee on Medical Care
and Sickness Insurance addressed itself to the problem of rising health care costs and ways and means by
which the expenditure could be contained. The meetings were attended by delegates from a large number of countries. Short notes on the deliberations of these Committees appear in this issue olthe "Asian
News Sheet". The reports presented at the meetings and the conclusions of the Permane nt Committees,
will be submitted to the ISSA GeneralAssemblv at Madrid in October 1977.
The Regional Director visited Turkey and Iran in November 1976. The mission was highly
rewarding as it gave an opportunity to know, first hand, the recent developments in the social security
programmes in these countries. The investment portfolio of social security funds in Turkey, the creation
of Social Security Fund and the measures adopted to improve the health care delivery system in Iran
were the highlights of the study. The present issue contains a brief account of the mission.
Like in the previous three
issues of the Asian News Sheet, this volume carries a report of the
in Asia and Oceania, carried out by the Regional Office during the
for work-related injuries and occupational diseases is the earliest and the
Survey on Work Injury Programmes
last quarter. Compensation
most widespread social security measure. Every country included in the survey has a provision for employment injury compensation. The result of the study gives an interesting insight into the types of systems
adopted by different countries in the region. While both the employer's liability and the social insurance
system are in existence, the underlying assumption that the employer should be responsible for
the safety of the workmen, is common to both. The employment injury compensation programmes are
invariably financed by employers' contributions only.
The Second Meeting of the ISSA Committee on Provident Funds is being held at the invitation
of the Employees'Provident Fund of Malaysia, at Kuala Lumpur, from2-4 February 1977. Invitations
have been sent to the provident fund organisations in Africa, Asia and the Carribeans. The subjects
included in the agenda, viz., improvements in provident fund benefits and the problems and techniques
in the maintenance of records, will provide opportunity for exchange of views and experiences. It is
hoped that all the Asian provident fund organisations will be fully represented at the meeting.
The Fourth ISSA Regional
Conference for Asia and Oceania is being held at Izmir (Turkey)
April1977,
in
collaboration with the Turkish social security institutions. The invitations for
from25-29
the Conference have already been issued to all member institutes and other intereeted oryaoisations by thc
International Social Security Association. An announcement about the Confetence appears in this
issue.
, The I.L.O. have just completed a study of the "Cost of Social Security, 1961-71". The survey
,,:
shows tlrat social security spending in most countries, particular$ in Western Europe, is rising faster than
,.
the ustional income. The survey is intended to help policy makers by showlng what is happening in
other parts of tbe world. A brief review of the survey is being carried in this issue.
The, qhapter on "Social Security News" @rries" as usual, reportsof recentdevelopments
from member institutes. The I.S.S.A. is dceply obliged to.the Correspondents for their valuable contri-
..
,
bution.
REGIONAT ACTIVITIES
Mission of the Regional Director to Turkey and Iran
The Director, ISSA Regional Office for Asia and
Oceania, undertook a mission to Turkey and Iran
in November 1976.
Turkey
The mission to Turkey was mainly in connection
with the preparatory .arrangements for the ISSA
Fourth Regional Conference for Asia and Oceania,
which is being organised in lzmir from 25-29 April
1977, at the invitation and with the collaboration of
the Turkish social security institutions. Opportunity
was taken also to study recent developments in the
Turkish social security programmes and to renew
contacts
with the Chief Executives of the social
security organisations.
Turkey has
a fairly
comprehensive coverage in
the urban areas; the social security legislation does
not yet apply to agricultural labour in the rural
parts of the country. The Social Insurance Institution (Sosyal Sigortalar Kurumu) provides, besides
old-age, invalidity and survivorship pensions, short-
term benefits for contingencies like sickness, maternity and employment injury. For the provision of
medical care, the Institution has a net-work of hospitals and clinics manned by full-time medical and
para-medical personnel. The scheme covers compulsorily employees of industrial and commercial
establishments. The Pension Fund of the Turkish
Republic (Turkiye Cumhuriyeti Emekli Sandigi)
provides old-age, invalidity and survivorship benefits
to employees in public enterprises, civil servants and
members of the Armed Forces. The Social Insurance
Organisation for the Self-Employed (BAG-KIJR)
provides pensionary benefits to self-employed persons,
including artisans, craftsmen, traders and those
belonging to the independent professions, except
lawyers and farmers. The Turkish Armed Foress
Mutual Assistance Fund (OYAK) runs a provident
fund scheme for the Armed Forces.
During his stay in Ankara, the Director met Mr.
Celal Sardan, General Director, Sosyal Sigortalar
Kurumu, Mr. Zafer Ozkaynak, General Director,
Turkiye Cumhuriyeti Emekli Sandigi, and Mr.
Nevzat Evgun, First Deputy General Director,
BAG-KUR. He also met Mr. Semsettin Unlu;
Deputy General Manager, Ordu Yardimlisma Kurumu.
One striking feature of the working of
these
organisations is the broad investment portfolio of
the social security funds. A significant part of the
investible funds is used for investment in real estate
and housing projects, both by way of constructing
housing colonies and by loans to housing cooperatives. Funds are also invested in selected industrial
stocks. The OYAK has invested a sizeable part of
its funds in automotive, petro-chemical, foodstuff
and cement industries in which they have managing
interest. It is said to be one of the largest
most pervasive conglomerates in Turkey.
and
During his visit to Izmir for seeing the local
arrangements for the Asian Regional Conference,
the Director visited the Regional Office of thb
Sosyal Sigortalar Kurumu (SSK). The Regional
Office has a full-fledged construction division
under the charge of a senior architect. At Izmir
alone, the SSK has advanced a sum of TL 248 million for construction of houses. Besides, they have
construbted, for rental purposes, a huge building
complex, on an area of 52,000 sq. metres. The total
investment made in this complex was TL 192 billion. The complex consists of 73 shops, one cinema
hall, one threatre, one departmental store, 620 Bureaux and auto-parking. SSK expects a handsome
return on its jnvestment. Social security funds play
an important role in the socio-economic develop-
ment
of the country, and
through their earnings,
augment the benefits to the insured persons.
Iran
During his stay in Tehran, the Director spent
institutionsthe Social Security Organisation (SSO) and the
National Health Insurance Organisation (NHIO),
and met the Chief Executives, Mr. M.R. Neghabat,
Deputy Minister for Social Security and Chairman
some time with the two social security
and Managing Director of the Social Security Organisation, and Dr. Assad N. Aram, Deputy Minister
for Health and in-charge of the NHIO. These
organisations have undertaken a very ambitious
programme of conrputerisation of their administration and also decentralisation of decision-making
processes.
The Director also called on the Hon'ble Minister
of Health and Social Welfare, Dr. Sheikholeslamzadeh, and expressed ISSA's profound satisfaction at
the fast growth of the social security programmes in
Iran, and appreciation of lranian social
security
institutions' continued active collaboration in the
work of the ISSA.
The SSO has set up a Social Security Fund in
compliance with Article l0 of the law establishing
the Ministry of Health and Social Welfare. The
Fund will have financial and legal independence
and will feed both the SSO and the NHIO. The
income of the Fund will be derived from the revenues of the SSO, revenues of the Government
employees' insurance against old age, invalidity or
death and of all those Govetnment corporations and
institutions which were excludcd from the National
Employment Act. The organs of the Fund are:
High Council, Board of Directors, Investment
Council and the Auditor. The Board of Directors
of the Fund consists of 5 members as follows : The
Deputy Minister in charge of SSO as Chairman; two
members recommended by the Minister of Health
and Social Welfare and approved by the Council of
Ministers; and one representative each of employees
and employers, recommended by the Minister and
approved by the Council of Ministers.
The intention is that the Fund should be administered independently of the SSO and the NHIO,
which may concern themselves only with the disbursement
of
benefits.
Having. an Insurance Fund with a separate legal
entity and the creation of a separate organisation
(NHIO) to provide medical care benefits under the
social security law, are features which distinguish
the Iranran social security scheme from similar schemes in other developing countries in Asia.
The Director was impressed by the progress
which the medical care delivery system has made in
Iran. During the short period of about two years
after the setting up of the NHIO, several far-reaching changes have been effected. The hospitals are
reported to be functioning much more efficiently;
waiting lists have very nearly been eliminated; there
is an emphasis on domicilliary treatment; the adoption of both the 'direct' and 'indirect' systems has
yielded valuable comparative data; the hospitals
have been graded to ensure correct charges for
medical services; the list of drugs and medicines has
been substantially reduced and several other measures have been taken to contain the rising cost of
medical treatment. They have plans to build 20
new hospitals during the next 3 years and to provide about 20,000 additional doctors, mainly by
recruitment from abroad. The Government is keen
on providing medical care facilities to the entire
population under the national health insurance
scheme.
Survey on Work Injury Programmes ln Countries in Asia and Oceania
INTRODUCTION
In the previous tbree issues of the Asian News
Sheet, results of brief surveys were published on the
provision for old age, invalidity and death, the pat6
tern of health protection and Unemployment lnsurance in countries in Asia and Oceania. A similar
study has been made during the current quarter of
the pattern of compensation for work injuries sus-
tained by persons employed in industrial and commercial enterprises. Compensation for work-relatdiseases is the earliest
measure in the
widespread
social
security
most
and
throughout
in
as
indeed
the
countries the region,
the
countries
included
in
world. All the nineteen
provision
for
survey have, in one form or the other,
compensation for work connected injuries.
ed injuries and occupational
At least four countries (Australia, Japan, New
Zealand and the USSR) had enacted workmen's
compensation legislation before the First World
War. Six countries, viz. Burma, India, Israel, Malaysia, Pakistan (as part of India) and the Philippines
enacted work injury compensation laws soon after
the First World War in early '20s and the rest,
namely Fiji, Indonesia, Iran, Iraq, Korea, Labanon,
Sri Lanka, Syria and Turkey in '30s and early '40s
following closely the growth of jndustrialisation in
these countries. By 1945, alnrost all the countries
in Asia had statutory provision for compensation of
loss of wages in the event of disability or death caused by work injuries or occupational diseases.
There has been a general trend in recent years,
however, towards integrating the work injury compensation benefits with other social insurance programmes, or where workmen's compensation is the
only social security programme in force, converting
the same into a social insurance scheme.
Types of Systems
Two distinct types of systems can be recognised:
(a) National legislation requiring the employers to
pay a prescribed rate of compensation in the event
ofl disability or death caused by employment iniury
or by specified occupational disease. The employers
in most countries where workmen's compensation
law exists, are required to compulsorily insure their
liability with private insurance company or a public
carrier. In some countries, however, there is no
provision for compulsory insurance of theliability;
(b) Social insurance system under which a prescribed
rate of contribution is paid by all employers covered under the programme, to a Central Fund out of
which the statutory authority administering the Fund
pays the compensation in the event of disability or
death caused by employment injury or occupational
disease. The social insurance programme may be
administered separately for work injury benefits or
it may be an integral part of the general social security scheme in the country.
Coverage
Employment injury insurance programmes com-
monly apply to wage and salaried workers and normally exclude the self-employed. The programmes
of the more industrialised nations cover practically
all employees in the country. However, most countries exclude agricultural employees. Some programmes also exclude employees of small establishments.
Source of Funds
Ernployment injury programnes are financed
ordinarily by employers' contributions only. In a
few cases where work injury benefits form part of
the general social insurance programme, the common contribution covers workmen's compensation
payments also. This feature, namely the work injury compensation being considered essentially the
liability of the employer, reflects the traditional assumption that the employers should be responsible
for the safety of the workmen.
Benefits for Insured Workers
The insured worker is entitled to compensation
for the loss of wages and medical care facilities for
the treatment of the injury. The compensation is
both for temporary disability and also for permanent
total or partial disability. Practically all the schemes
allow work injury benefits without any qualifying
period of insurance or employment. The only condition to be fulfilled is that the injury for which
compensation is paid must arise out of and during
tf e course of employment. This concept is now
gradually being liberalised in a number of countries
to cover also transit to or from the place of work.
Temporary disablement benefits are usually payable from the start of incapacity caused by employ-
ment injury, although some countries require a
waiting period of usually I to 3 days, and sometimes
longer before benefits actually begin. There is generally no limit to the period for which temporary
disablement benefit can be drawn although in some
countries tlre maximum duration is fixed at 26 or 52
weeks. In these cases, if incapacity lasts longer,
temporary disablement benefit may be replaced by
permanent disablement benefit.
The rate of disablement benefit is a percentage
of the injured worker's wages which may vary from
50-100 per cent. In the event of the injured workman having been rendered permanently disabled,
he is entitled,to a pension for life, the amount of the
pension depending on the medical evaluation of the
extent of loss of earning capacity. In some countries, however, the benefit for permanent disable-
ment is paid in the form of a lumpsum. Apart from
cash benelits, the injured workman is usually entitled to medical and hospital care and rehabilitation
services. Such services are provided free without
any cost-sharing by the worker.
Benefits
for
Survivors
The work injury benefit schemes also provide
pensions or lumpsum payments to the survivors of
the workers who die as a result of the employment
injury. These pensions are payable to the widow
regardless of her age until her death or re-marriage;
to the disabled widower; and to orphans while they
are below specified age limits. The rate of survivors
benefit is usually the same as for temporary disablement or permanent total disability benefit.
Administrative Organisations
The programmes where the legislation only pro-
the employers' liability to pay compensation do not require an elaborate administrative machinery, except for purposes of supervision. In cases
where the work injury benefits are paid as part of
the social insurance programme, there is usually an
independent statutory organisation entrusted with
the task of collecting the contribution and paying
vides for
The schemes cover generally all the employees
in industrial and commercial establishments. Some
countries, however, restrictthe coverage on the basis
of the minimum number of employees in the establishment coming within the scope of the legislation,
e.g. Burma (5); India (10); Japan (5); Korea (30);
Malaysia (5); Sri Lanka (10). Agricultural workers
are usually excluded from the coverage, except in
Australia, the USSR, New Zealand where sharefarmers are covered and Lebanon and Syria where
farm workers of mechanised farms are included in
the statutory schemes. Self-employed persons are
also usually excluded from the compulsory scheme.
In some countries like in Japan, however, there is a
provision for voluntary insurance of the selfemployed.
In all the countries included in the studY, the
employers pay the whole cost of the work injury benefits either directly or through the payment of the
premium to the insurance company or the public
carrier, or through contributions made to the statutory authority administering the scheme, as the case
may be. The premium/contribution in most countries is fixed on the basis of the accident hazard involved in a particular industrY.
the benefits.
Situation in Asia and Oceania
A reference to the U. S. Department of Health,
Education and Social Welfare, Social Security Administration publication, Social Security Programmes
Throughout the World, /97J shows that in countries
covered by the survey, workmen's compensalion
Iegislation providing for employer's liability exisrs in
Australia, Fiji, Japan, Korea, New Zealand and Sri
Lanka. Except for Fiji and Sri Lanka, the legislation in all these countries requires the employers to
insure their liability with private or public insurance
carriers. Other countries, viz. Burma, India, Indonesia, Iran, Iraq, Israel, Lebanon, Pakistan, Malaysia, Philippines, Syria, Turkey and USSR, now have
social insurance systems for providing benefits for
work-related injuries. While in Indonesia and
Malaysia, the statutory schemes provide only the
employment injury benefits, in all the other countries, the work injury compensation forms an integral
part of a comprehensive social security measure.
There is no uniformity with regard to the quantum of temporary disablement benefit, permanent
disablement benefit or survivors pension. The rate
of benefit varies from 50/o to l00o/o of earnings. In
the higher bracket are the schemes in Australia
(100%), Indonesia (100?;), Iran (75o/),Iraq (100o/o),
Israel (75o/o), Lebanon (75'/), New Zealand (100%)
Philippines (90%), USSR (100%). Similarly, there
is no uniformity with regard to the waiting period
before the temporary disablement benefit commen-
ces. In Australia, Indonesia, Iran,
New Zealand,
Syria, Turkey and USSR, the benefit payment begins from the first day of disability. In other countries, there is a waiting period of 1-4 days, except in
Sri Lanka where there is a waiting period of 7 days
and in Korea and lraq it is as long as 8 days. In
some countries, like in India and Malaysia, the
waiting period is conditional on the disability lasting
less than a certain number of days. All the schemes provide for full range of medical care for the treatment of employment injury.
SOCIAL SECURITY NEWS
AUSTRALIA
Department of Social Security
HIGHLIGHTS_1975.76
The Department faced a considerable challenge
during the year-to maintain its level of service to
an increasing number of clients while at the same
time observing necessary financial and staff economies.
The nature of the Department's workload has
changed over recent years. Most of the workload
used to be concerned with servicing pensions, such
as age pensions, lvhich were long-term in nature
and, because most recipients' circumstances were
rarely subject to change, did not involve frequent
reassessment. In more recent years, however, there
has been an increase in the number of clients re-
ceiving benefits of a short-terrn nature-such as
unemployment benefits-and where the circumstances of the recipient are more liable to change-as
is the case with supporting mothers benefit. Overall, this has resulted in a situation where a much
greater volume of assessments and reviews of entitlement have to be made.
The number ol people receiving regular pension,
benefit or allowance payments from the Department
has risen sharply in the past four years-from some
The past year has again been a period of significant change in functions for the Department. In
the early part of 1975-76, the Department was
deeply involved with the introduction and initial
administration of the original Medibank health insurance scheme. However, in December of 1975
the new Government revised the administrative
arrangements and health insurance and related
functions were transferred to the Department of
Health. At the same time, the compensation functions of the former Department of Repatriation
and Compensation were transferred to this Department. The major current task in the compensation
area is the investigation of options for a national
compensation programme.
Following the announcement of the abolition of
the Social Welfare Commission, a number of
functions of
the Commission were transferred to
at 30 June. The functions of the
the Department
Interim Childrens Commission were transferred to
the Department from the Department of the Prime
Minister and Cabinet.
The Department's computer network continued
to expand during the year and all States are now
using a basic ADP system for unemployment and
3.2 nrillion at 30 June 1972 to 4 million at 30 June
sickness benefits payments. The use of the compu1976. This has resulted from demographic factors,
ter for the production of cheques and associated
the introduction of new types of assistance and the
accounting procedures has resulted in greater
economic situation. The growth in the number of
efficiency in the processing of claims. This has
people receiving unemployment benefit has been a
helped avoid delays and enabled the Department to
major factor. ln l97l-72 a total of 225,400 grants
provide a better service to its clients.
were made to people who qualified for unemployment benefits. In 1975-76 the comparative figure
In the social security benefits area, the most
was 891,000, which represented an increase of significant change during the year was the amalganearly 300%, The number of widows and support- mation of child endowment and student endowment
ing mothers'grants and transfers rose from 24,552 in into a single family allowance with, at the same
l97l-72 to 56,933 in 1975-76, an increase of l32o/o.
time, a substantial increase in the rate of payment.
The short period between the decision to change
the system and its implementation posed a challenge
for the Department in terms of amending a largevolume payments system within a brief time-scale.
This operation was, however, successfully carried
out.
In the current economic conditions, training has
become particularly significant for the disabled so
that they can better compete in a tighter labour
market. Despite the labour market
conditions,
I,376 rehabilities were placed in employment follow'ing rehabilitation assistance, an increase of 12o/o
over the previous year.
In the field of Migrant Community Services, the
Telephone Interpreter Service continued to expand
and has developed into an integral part of social
welfare services for migrants in the five mainland
capitals. The major TIS developments during the
year were the opening of offices in Brisbane and
Adelaide. In addition to its normal interpreting
function, TIS played an important role following
the Italian earthquake disaster in May 1976 and in
the 1976 census.
During the year the Department provided special
to some 3000 refugees from
Vietnam, Laos, Cambodia and Timor.
welfare assistance
(From Department of Social Security, Australia,
Annual Report, I 97 5-76 )
INDIA
Employees' Provident Fund
EMPLOYEES' DEPOSIT.LINKED INSURANCE
SCHEME T976
The Government of India has, by an Ordinance,
introduced a Scheme called the Employees' Deposit-Linked Insurance Scheme, 1976, to provide life
assurance benefits to the employees who are members of the Provident Fund and it has come into
force from I August 1976.
The Scheme provides that in the event of the
death of an employee, who subscribes to the Provident Fund in an establishment covered under the
A noteworthy feature of the Scheme is that the
employee is not required to make any contribution
to the Insurance Fund, but he is required to keep a
minimum average balance of Rs. 1,000 in his Provident Fund to become eligible to receive the benefit
payable under this Scheme. The benefits received
shall not be liable to attachme nt in a civil suit or to
income-tax.
As regards the contribution under this scheme,
the same will be made by the employers and the
Central Government @ | of lo/o and I of I %, respectively, of the wage bill of the employee every
month. In addition to this, the employers and the
Central Government will contribute l/10 of lo/o and
ll20 of lo/o, respectively, of the wage bill towards
Employees'Provident Fund and Misc. Provisions
Act, 1952, the person entitled to receive his provident
fund accumulation would be entitled to an additional
payment equivalent to the average balance in the
Provident Fund of the deceased during the preced- admin istrative charges.
The Scheme is intended to benefit about 8 million
ing three years, subject to a maximum of Rs. 10,000.
employees
in the country.
The amount payable will be deposited in the Savings Bank Account to be opened in the name of
( From our Correspondent, Mr. R,R. Sahae, Deputy
the beneficiary in any one of the nationalised Central Provident Fund Commissioner, Employees'
banks.
Provident Fund, India)
l0
Assam Tea Plantations Prov. Fund
PROVIDENT FUND AND PENSION SCHEME
of shares
societies.
of
consumer and industrial cooperative
The Assam Tea Plantations Provident Fund and
Pension Scheme introduced in the year 1955 is the
most comprehensive welfare organisation for the
socio-economic uplift of the tea workers in the
State of Assam. With a guaranteed and respectable
sum to be had on retirement plus insurance and
pension, the tea workers in the State, who are the
weaker sections in the society, do now hopefully
Forthwith settlement of provident fund claims is
on (i) retirement from service: (ii) repatriation; and (iii) death. In the case of voluntary retirement from service, a member is required to wait
for a pericd of six months.
look for brighter days in the future.
Transfer of accounts
Scope
Movement of the tea workers frorn one garden
to the other on change and transfer of service is a
commoll practice. In such cases, instead of making payment to the transferee workers in settlement
of accounts, the provident fund accu mulation is
transferred to the receiving garden by effecting book
transfer of accounts from the transferee garden.
The provident fund schenre covers all the tea
estates having 25 or more acres of land under tea
producing 450 lbs. of tea per acre and those having
50 or more acres under tea irrespective of the rate
of production. Due to this restrictive provision, a
few small unils have been left out of the purview of
the scheme. The provident fund organisation is,
however, constantly reviewing the possibility and
feasibility of covering them.
The employees oI all categories, barring personnel belonging to managerial and executive cadres
and other employees whose total cash emoluments
exceed Rs. 1,000 per month,
vered under the scheme.
are compulsorily
made
Investment
The provident fund collections are invested in
Government securities, 809/o in National Savings
Certificates and 200/6 in other Governrnent securities.
The basic policy of investment is to derive highest
yield and ensure absolute security.
co-
Interest
Contributions
The
Settlement of claims
rateof contribution to the fund is 8o/o of
the employers.
wages of the members and 8o/o from
Interest at 4o1/o is credited to the provident fund
accumulations. The balance of the interest earned
is transf'erred to undisbursed surplus interest
account, from which pensions/family pensions are
The collection is made by employers at source and
deposited with the Fund, rhrough the State Bank of
paid.
India.
Insurance
Advances from provident fund
The scheme offers scope and opportunity to
members of the Fund on optional basis to insurq their
The practice of utilising provident fund as sour- lives through their provident fund accounts. A
ce of borrowing is discouraged. However, the large percentage of the employees have taken
scheme provides for grant of advances, refundable
advantage of this insurance scheme.
as well as non-refundable, from provident fund
accumulations, on specific grounds and a nominal Pension
interest is charged in order to put a check to wasteThe Pension Scheme was implemented in the
ful borrowing.
year 1967. It was revised in 1973 by making the
Consumer cooperative societies have a
vital
role
to play in rural and particularly in remote tea garden areas. Accordingly, to encourage the cooperative movement in the State and especially in the tea
garden areas, a sizeable amount of non-refundable
advance has been made to the members for purchase
pension benefits more liberal. A major modification
to the Pension Scheme was effected in the year 1972
by implementing the family pension scheme.
Every member of the provident fund automatically becomes a member of the Pension Fund without any additional financial liability and enjoys be-
ll
nefits of pension on retirement from service at fixed
rates depending on the period of membership and
the quantum of provident fund accumulations to
the credit of the member on the day of his retirement. [n the event of death of a member while in
service, the family of the deceased member gets a
lumpsum grant of Rs. 1,000 and
of Rs.40/- forlife.
a
monthly pension
(From ourCorrespondent, Mr. S. C. Bhattacharjee,
Secretary -cum-
P.F. Commissioner, A.T.P.P.F. and
P.S. India.)
IRAN
Social Security Organisation
MANPOWER DEVELOPMENT AND CURRENT
RELATED PROGRAMMES
The necessity of centering attention in any organisation upon the intelligence and willingness with
which human labour is applied, has caused a pro-
Introduction
Social Services in any comprehensive national
development activity and as a reflection of the
philoso phy and need of a rapidly changing society,
have been receiving much recognition in many
different countries. Having social services in a
nationalcomprehensive development plan, however, can be meaningless without the ability to
provide the society with that service efficiently and
nounced shift in managerial emphasis. Executives
have come to a new evaluation of administrative
ability in terms of efficiency and effectiveness in
directing people.
The following discussion is focussed on the
important and work-related factors of human
nature and will be followed with the Iranian Social
Security Organisation's programme concerning
effectively.
manpower development.
Providing effective service, however, depends
upon several important factors such as:
Human Nature Unchanging
-The
the plan to reach the goal;
-Nature of
of financial and human
-Availability
ces;
-Manner
ed;
All of us, regardless of status, Ianguage, colour
race, basically desire the same fundamental
things in life. The demands which others make
upon life, may be gauged by the demands which we
make, not necessarily in detail, but in essence.
Home, family, prestige, security, these are the
significant influential factors in controlling the life
of the humblest night watchman as in controlling
the life of a giant organisalion's president.
Moreover, the common element of human
nature meaos that the same kinds of appeals and
or
goal of the Organisation;
resour-
in which the resources are allocat-
--Organisational structure and delegation of responsibilities.
Because of the fact that man must determine
the goal and the plan of an organisation, and methods tend to secure the same kinds of response
because financial and human resources are also from different people. Because, in essence, people
allocated by man and he also must delegate responsibilities to carry out the programmes, the most
important factor influencing the success or failure
of any organisation is indeed the manpower within
that organisation.
t2
and needs, we can
purposes and
ideas,
that
be reasonably confident
have
appeal for
to
aspirations which are found
general
a
appeal
limited groups, will probably find
are moved by the same desires
also.
No study of
however, unless
it
human characteristics can go far
is grounded in a knowledge of
the influence of bodily conditions upon life and
attitude. Much of the variations in the responses
needs of the organisation;
-The
of the programme
-Nature
to meet the needs;
assessment and alternatives.
-Programme
of people to similar situations are due to differences
In developing countries, human factors at work
of physical conditions and mentality.
and human motivations are generally ignored. Due
to the recent realisation of the Iranian social secuThe desire for a sense of Individual Contribution
rity of the extreme importance of this factor,
If it is possible to select any one trait as out- it is being taken into consideration by the managers
standing influence in behaviour, it is perhaps, that
and results attained are fruitful.
one spoken of as the self-assertive tendency or the
effort to maintain a sense of usefulness. The
In order to know what to train for, an organisaimportant factor here is the manner in which the
tion must first identify the areas in which training
manager nolices and gives credit to an employee's
to the employees is needed. Job evaluations,
good work and the way he tries to make construccommunications with the supervisors and the emtive criticism to the employee when he does ployees themselves,
are methods by whicli the need
wrong.
People in general, prefer activities which
are accompanied with achievement and recog-
can be identified.
A
manpower development programme should
a programme that can
effectively satisfy the needs. And finally, there
should be a method by which the programme and
employee's progress can be assessed and alternative
corrections be made in the programme to close the
gaps. In social security, however, this also must
be taken into consideration that those who receive
the services are people who have worked all their
nition. Fundamentally, the action
also focus on developing
conditions so that tlre workers can effectively use
their creative impulse to benefit the organisation.
lives, or have worked and have been disabled,
women who have been widowed and people who
are ill and need help. Their basic motives are the
same as that of the employee, that of seeking security. In other words, these are people who have
given their contributions to the society by working
and now need the affection and the care which
they well deserve. Therefore, the employees of
which
greatest
self-satisfaction
group
assures the
and
approval is that which gives some sense of creativity.
When channels are not provided for this motive to
be satisfied, suppressiorr or repression may result, and
the result is harm to the organisational goal achievement process. Workers preoccupied by fears of their
bosses, of insecurity of employment, of domestic
worries or by boredom and antipathy to theii job
may refrain from wholesome release of energy.
The manager, therefore, must provide such work
The desire to possess
There is in human cnaracteristic of possessiveness a stabilising influence of social value. If the Social Security Organisation must be trained to
people can establish an area of control, even be kind and understanding. They must be willing
though it may be a small area, a feeling of self- to give to their clients what they deserve.
satisfaction is secured. This feeling also results in
motivating a sense of belonging to the respective Manpower Development Programmes of
organisation or place of work. Naturally, when a the Iranian Social Security Organisation
person feels a part of organisation, he will try to
The Iranian Social Security Organisation realised
contribute more towards the goal of that organisation by increasing the quality and quantity of his the importance of having a sound and effective
training programme. Therefore, theOrganisation
work.
has
attempted to establish a programme that can
Among other human tendencies not mentioned
embody in itself the realisation of all the aspects
here, are love for family, association and group
mentioned. To administer the programme, the
approval.
Department of Research, Training and InternationIn developing a manpower development progra- al Affairs has been established. Duties assigned
mme, there are other factors that also must be con- to this Department include: conducting research to
sidered. These are:
discover the various aspects related to social secuwhom the services are given;
rity around the world and suggest improvements on
-To
13
the basis of these findings to
the
Bcard of Direc-
tors.
taught with
institutions.
The Department is
also responsible for determining the future manpower needs of the Organisation, testing the candidates for employment,
interviewing and selecting the new members and
recommending those selected for completion of
final employment procedures to the Personnel
Office.
Aside from these, the above Department
is
also responsible for identifying the training needs
of the employees and arranging for the m 1o receive
the required lraining.
The
work procedure
of
this department is
as
follows:
-Through
ments,
communication with other departthe manpower needs are establish-
ed.
need is reported to the Financial office to
resources.
-Qualifications to fill the positions are identified in accordance with job requirements.
manpower need is advertised in a nation-The
al paper.
sessions are arranged to test the canemployment.
-Testing
didates for
questions reflect the areas
in which man-
power is needed.
-Interview sessions are arranged with lhose
who have passed the examination.
are made.
-Selections
In conducting training programmes, the lranian
Social Security Organisation places a special emphasis on management training. With the cooperation
of local educational institutions, the managers are
sent to participate in classes that focus on various
aspects of management, including human motives.
Because of the extreme importance of data processing and computer knowledge in today's management, classes in these areas are also available to
the managers through the Department of Research,
Training and International Affairs. Other training
areas at the present time include Accounting,
Secretarial training, Statistics, Book-keeping, Filing,
English language, Actuarial Science, Sociology,
Economics, Accounts and Finance.
of the subjects in the above course are
in the Organisation itself; others are
Some
taught
t4
cooperation
of local
educational
The more an employee knows and
learns
about the Organisation for which he works and the
environment in which the Organisation functions, the
better he can perform his duties. Therefore, the
Department of Research, Training and International
Affairs, has established classes for the new employees to teach them what the Iranian Social Security
Organisation is all about and how it carries out its
work. Time duration for such classes is three
weeks. For new employees, there is also a twoyear probationary period, during which their performance is closely observed by the supervisor.
After two years and with the approval of the supervisor, the employee receives official status as a
member of the Iranian Social Security Organisation
and becomes eligible to receive the benefits provided.
-The
supply the financial
-Test
the
The Department of Research, Training and
International Affairs also conducts a survey every
six months to establish the new training needs of
the employees, and then acts accordingly. Aside
from having arrangements with the various educational institutions within the country, through the
above Department, scholarships are also provided
to the selected and qualified students and personnel
to study abroad in the fields that the Organisation
can benefit from. The scholarships, are granted
on an undertaking
to work for the
Organisation
after graduation for a minimum period of time
equal to twice the time for which they receive aid
from the Organisation.
The training programmes mentioned are also
given to the regional branches of the Organisation.
When the facilities lack sufficiency, the employee
is transferred to Teheran to receive the training.
Within this framework the Iranian Social Security
Organisation conducts its manpower development
programme and the results attained since the beginning of the new programme has given us much
encouragement to continue carrying out our mission
of providing for the Organisation better and more
effective members.
( From our Correspondent Mr. B. Moshaver,
Director, Research, Training and Internalional Affoirs
and Mr.
S. Asbaghi, In-charge, Training Section,
S.S.O.,Iran)
MA.LAYSIA
Social Security Organisation
RECENT DEVELOPMENTS IN SOCIAI, SECURITY
Extension of Social Security Coverage to Rural
workers
Hitherto, social security programmes
sia have been confined to employees
in
in
Malay-
urban areas
administrative considerations.
only, mainly due to
The urban coverage which began in October l97l
with 804 industries employing 23,094 insured persons
in one centre has, at the end ofJuly 1976, reached
20,726 industries with 720,291 insured persons in 33
urban contres. The Social Security Organisation is
now focussing its attention on the rural sector and
action to implement the social security programmes
in 6 rural areas, having about 1000 industries employing nearly 50,000 employees (mostly plantation
and mine workers) has just been completed. The
programme covering Permanent Invalidity, Industrial Accidents and Occupational Diseases (as in
the case of the 33 urban centres) was implemented
in the 6 rural areas with effect from I December
t976.
Reorganisation of the Social Security Organisation
Since its inception in January 1971, the Social
Security Organisation (SOCSO), Malaysia, has been
operating as a Government Department under the
administrative control and superintendence of the
Ministry of Labour and Manpower. Of late, however, questions of considerable consequence have
arisen regarding SOCSO's status and the type of
body which is most suitable for the future adninis-
tration of social security schemes. ILO advice was
sought in this regard, and, in his report, the ILO's
Regional Adviser on Social Security has recommended, inter alia, as follows:
"To be equal to its tasks, and to achieve its
rapidly changing and growing objectives, SOCSO
must have a sufficient measure of autonomy to
ensure that it is fully equipped and capable of
immediate adjustment to new circumstances and
requirements".
The Governmenthas since accepted this recommendation and agreed that SOCSO should be reconstituted into a full-fledged statutory body. This
will mean that while Government retains control
over policy, SOCSO will have sufficient measure of
autonomy
and flexibility in implementing
social
security programmes promptly and effectively. The
enabling legislation has been drafted and it is hoped
that it will be passed by Parliament soon.
Computerisation
Plans for
the introduction of electronic data
processing into SOCSO have reached the final stage.
It is expected that SOCSO will acquire 'its own
computer hardware in the early part of 1977.
Meanwhile, SOCSO is using the computer installation at the University of Technology, Malaysia,
where computer time is available for its need in the
initial stages. A crash 6-week training course in
computer operations and programmingfor 1.2 officers
and staffof SOCSO was held recently. They are in
fact the nucleus of the Electronic Data Processing
Division that will be set up in due course.
Phase I of SOCOS's computerisation programme
will embrace the implementation of the contribution
system. The first step involved under this system
will be recording of information relating to registered employers and insured persons in 'files on magnetic disks' known as'databases'. Construction of
'databases'
for
employers
whilst action in regard
to
is
now well under way,
the insured persons will
commence shortly.
A notable achievement in the field of computerisation within a short space of time is the replacement of the present stamp-system of paying contributions by a revised 'payroll' system. Under the
revised system, the employers will pay their monthly
contributions by means of cash or cheque together
with prescribed Contribution Vouchers at any of the
approved banks and submit to SOCSO at 6-monthly
intervals the Contribution Schedule giving details of
the insured persons and their contrjbution history.
As from I July 1976, the revised system is in force
in the largest centre which has nearly 6000 industries (more than 25o/o of the total number of registe-
red
industries
in
Malaysia) with about
183,000
insured persons. Plans are afoot to introduce the
revised system in 4 more centres with a total of
l5
nearly 2,100 industries employing about 135,000
insured persons, with effect from
I
January 1977.
ILO/SOCSO Collaboration
The progress so far achieved in the activities of
reorganisation and computerisation mentioned
above is attributable, in no small measure, to the
and services rendered by the two ILO
Experts, who are currently advising and assisting
SOCSO under the UNDP Project.
guidance
(From
our
Correspondent,
Mr. P.
Shanmugam,
Asst. Director General, Social Security Org,anisation.
Malaysia)
PHILIPPINES
Social Security System
SERVICE LOANS UNDER THE PHILIPPINE SOCIAL
SECURITY PROGRAMME
Educational Loans
A unique feature of the Philippine social security programme is the service loans offered to
qualified members as additional privileges to help
them in their financial needs. These service loans
are: (i) salary; (ii) educational; (iii) Study now, Pay
in 1966. It was intended to help members defray
the cost of education. It is essentially an invest-
Iater; (iv) housing; (v) community hospital; and (vi)
investment incentive loans.
Salary Loans
Salary loans are
mostly availed of by wage ear-
When introduced in 1964, it was intended to
replace the refund of contributions to wage earners
separated from employment who had paid contributions for at least two years.
ners.
Any member,
employed
or
unemployed, who
has paid at least 34 monthly contributions (prior to
27 October 1975, contribution required was 40) is
a loan equivalent to one month salary
but not exceeding P1,000.00. If the member is
employed, the loan is repayable in one year in l2
equal monthly payroll deductions. For unemployed
members, payment is to be made directly to the SSS
or any of its authorised banks throughout the
country.
eligible for
As ofJune, 1976, the SSS has paid out a total of
P879.6 million for salary loans benefiting2,105,743
members from
P417.
t6
all
walks of life
at an
average of
The educational loan programme was introduced
ment in human resources because it will eventually
improve the quality of the country's manpower.
Any member who has paid at least 24 monthly
contributions under his current employer or a total
of at least 34 contributions under his current and
previous employers may avail of an educational loan
for himself or any of his dependants. Like salary
loan, the loanable amount is one-month's salary up
to P1,000.00, repayable within one year in l2 equal
monthly payroll deductions.
Unemployed members are also extended this
loan service provided they have remitted at least 34
monthly contributions.
As of June 1976, total disbursements amounted
to P 52.2 million, benefiting 162,560 members.
Study now, pay later plan
The latest involvement of the SSS in educational
financing is the o'Study now, pay later plan" of
the Government. This is an opportunity given to
poor but deserving students who pursue higher
education and training in the fields of study vital to
the development of the national economy. Under
this programme, both the SSS and GSIS (Government Service Insurance System) grant loans for
tuition fees, books and living expenses to students
cenrolled in development-oriented courses such as
inAgriculture, Engineering, Geology, Chemistry,
Economics, and selected vocational courses such as
in Electronics and Radio Communication.
The loans granted by the SSS under this scheme
are not limited to SSS members. In fact, out of
898 applications approved as of I September, 1976,
only l0 are from SSS members, 254 from dependants of SSS members, and 634 from students who
are neither members nor dependants of SSS mem-
5.
Reduced the premiums on mortgage redemption and fire insurance;
6.
Pioneered in the financing of group housing
in 1968 largely through turn-key arrangements with private developers for the construction of mass housing for SSS members;
7.
Financed the condominium housing of the
Philippine Business for Social Progress on a
"ballooning of payments" plan to help lowincome families and provide within the
housing complex additional employment opportunities, by means of small-scale industry
bers.
Maximum loanable amount is P4,000.00 each
year. Repayment starts after graduation.
For degree courses, the loan is to be amortized in
l0 years, rvhile for non-degree courses, in 5 years.
SSS involvement in education and manpower
workshops to employable members of households so as to enable them meet amortization payments of loans; and
school
development is not limited to its educational loan
programme and the "Sludy now, pay later plan".
It has loaned P3 million to finance student loan
fund at the Asian Institute of Management, one of
the most prestigious private educational institutions
in the country. It is also assisting in financing the
Development Academy of the Philippines (DAP).
Todate, the SSS has released a total of P3 million
to its endowment fund and contributed Pl.5 million
for operations.
Housing Loans
The housing loan programme is intended to promote home ownership among SSS members and
member-employers. In assisting its members to own
their homes and providing them with a sense of
satisfaction and feeling of security for meeting one
of the basic needs of life, the SSS is effectively
serving the broader aims of social security.
of June 30,
1976 housing loans totalled
P771.6 million representing 24o/o of the investment
portfolio.
As
To allow housing loan resources to seep down to
low-income families, the following innovations were
instituted:
1. Maintained the concessional low rate of
interest of 60/o a year;
2.
Extended the paying period to as long as 25
years;
3.
Allowed as low as 20o/o of total family income for amortization payments;
4.
the loanable amount to as high
of the collateral value of the house
and plot;
Increased
as 9oo/o
8.
Supported the activities
Housing Corporation.
Total
disbursement for
of the National
this service loan as of
June 1976 is PI,984.7 million. The SSS now has
assisted 45,670 members who are proud homeowners, besides helping solve one of the social problems of the country today, and that is, acute lack of
housing units for the growing population.
The SSS will financially assist the operation of
the National Housing Authority (NHA). This is a
government corporation created in July, 1975 for
the purpose of developing a comprehensive and
integrated housing programme. The SSS has set
apart P85 million for the purchase of NHA longterm bonds. This represents 5Oo/. of the NHA
requirement for 1976. This will enable them to
fund their housing programmes in the private sector
including group housing that may be launched by
employers for their employees.
Community Hospital Loans
The SSS also pioneered in community hospital
loans, anticipating the implementation of Medicare.
As early as 1969 or three years before Medicare's
implementation in 1972,the SSS had already extended financial assistance to community hospitals.
This loan is intended to partially solve the acute
lack of hospital and medical facilities in the country,
arouse interest among medical practitioners and
give them a chance to serve the needs of the people
as an aid to social security and to gradually arrest
the migration of doctors to foreign countries and
make them practice in the rural areas.
out for this purpose is
hospital
and P700,000 for a
P470,000 for a 25-bed
The amount loaned
50-bed hospital.
t7
As of June, 1976, total disbursements for this
programme amounted lo P14.7 million for 33 community hospitals.
In addition to this hospital loan programme, the
SSS is considering plans
to
establish
its
own hospi-
tals soon.
Investment Incentive Loans
Introduced in 1969, the investment incentive
loan is a privilege given to SSS members to buy
stocks in any private enterprise registered with the
Board of Investment.
Any member who is 55 years old or less, and
has paid at least l2 contributions is eligible for a
loan not exceeding 50o/o of the applicant's total
annual salary. The loan is repayable in 5 years in
60 equal monthly payroll deductions.
A member who is more than 55 but not over 59
years of age may also avail himself of this loan
provided he pays the number of contributions
required, based on his age.
Between the programme implementation in 1969
until it was phased out in July 1974, in accordance
with the policy adopted by the National Economic
and Development Authority, a total of P7.3 million
was released for 3,337 members. This gives an
average loan of P2,175.00 to a member.
The 5.3 million SSS members now look up to
this institution not only as a source of protection
and security in times of contingencies (sickness, disability, retirement and death) but also as a dependable source of financial assistance at the lowest
possible cost. Interest rates on service loans, which
are 5o/o on salary loans, 60/o on housing loans of not
exceeding P30,000 and
9o/o
on excess,
60/o
on invest-
on community hospital
ment incentive loan,
loans, are way below the existing market
9o/o
l7o/o
rates
of
to l9o/r.
of the SSS expanded operations in the overall social and economic development effort programme of the Government cannot
be underestimated. Apart from service loans, the
SSS has invested its funds largely in Government
securities, particularly with the Philippine National
Bank (PNB), Development Bank of the Phillppine
(DBP) and the Central Bank of the Philippines
(CBP). Although the SSS is not directly involved
in financing commercial and industrial loans, its
funds are being utilised by the Government financing
intermediaries (the PNB, DBP & CB) for the purpose. As of June 30, 1976, investment in Government securities totalled P2,004.1 million ot 630/o of
the total investment Portfolio.
(From our Correspondent, Mrs. Pilar C. Quintos,
Today the impact
Public Afi-airs Dept., Social Security System,
Philippines.)
SYRIA
Social Insurance Institution
AMENDMENTS TO THE SOCIAL SECI,IRITY CODE
Effective I January 1977, certain new provisions
have been added to the Social Security Code and
several existing benefit provisions have been modi-
fied, with a view to providing more comprehensive
protection. The coverage has also been extended to include Government departments and
public sector undertakings for purposes of compensocial
l8
sation in the event
of disabilities caused by
work
injury.
The rate of temporary disablement benefit is
10% of the average wage for the first one month of
disability and l00o/o of the average wage thereafter.
The maximum duration for temporary disablement
benefit has been fixed at one Year.
The rate of benefit in case of total permanent
disability or death is
75o/o
ce cover in the following contingencies
of the average wage.
invalidity;
-Complete
-Death;
-Partial invalidity over 350/o
The pensionable age has been fixed at 60 and
the insured person must have at least had l5 years
service before he is entitled to pension. Pension can
be allowed at age 55,
with 20 years qualifying
ser-
In case of complete invalidity or death before r€-
The rate of old age pension is l/45 of the
average monthly wage multiplied by the number of
years of qualifying service, subject to a maximum
of 7 5o/o of the average wage. Provision has been
made for proportionate pension in cases where the
vice.
insured person does not have a qualifying period
:
tirement, the insured person is entitled
to a
lump-
sum payment equal to last one year's wage. [f complete invalidity or death is the result of an employment accident, the sum assured is increased by
so%.
of
service.
In the event of partial invalidity, the sum assured
is one-half of last one year's wages.
With a view to ensuring timely payment of contributions, the law provides for a penalty of 10o/o of
the value of the contributions due for every month
of delay, subject to a maximum of 30o/o of the contribution due.
This new benefit is financed through contributions by the employers at the rate of lo/o of the
wages of the workers who choose to participate in
this insurance. The insured person can opt for this
benefit within one year
The benefit payable to the insured person is not
attachable except to the extent of the dues payable
to the Institute or to the employers, and that too,
subject to a maximum of l/4th of the amount due to
the insured person.
of the date of
enactment
of this provision, and those who enter employment
later may do so within a period of six months of
entry.
(From Mr. Issam Al-Amiry, General Director,
The new law provides for an additional insuran-
Social Insurance Institut ion, Syria)
TURKEY
social Insurance organisation
OLD AGE,INVALIDITY AND SURVIVORS PENSION
Introiluction
By Law No. 1479, which was enacted on 2
September 197 l, a new social insurance organisation was established in Turkey for the self-employed. It is a scheme covering old age, disability and
survivors' insurance and covers craftsmen, artilawyers). Membership is compulsory, but the law
excludes foreigners. Voluntary insurance is also
provided for persons who have lost
insured
the Self-Employed (BAG-KUR)
status, provided they have been insured under
the scheme for at least two years. In order
to be voluntarily covered by the scheme, a person
who has lost his insured status must inform the
institution in writing that he wishes to continue
the insurance.
FOR THE SELF-EMPLOYED
sans, businessmen, medical doctors, engineers and
persons of other professions (excluding farmers and
for
-
Starting from I April 1972, the Government was
authorised to put the new scheme into operation
gradually, district by district, as the necessary preparations were completed. But with the application of a fully mechanised and centralised system,
contribution collections and benefit payments started throughout the country by I October 1972. By
l9
utilising banks' and post offices' services, in one year
and a half, the number of insured persons who applied by themselves for registration exceeded three
quarters of a million and the total contributions, one
billion Turkish Liras.
Benefits
The benefits provided under the new scheme are
as follows
:
Disability Pension
For the purpose of this scheme, a person who
has lost at least two-thirds of his working capacity is
considered a disabled person.
In order to be entitled to a disability pension under the new scheme, a person must have been considered to be disabled, have paid contributions for
atleast five full years and have submitted a claim for
a pension after he has left his occupation. The
amount bf pension payable to a disabled person is
70 per cent of the income taken as the basis for
contributions at the time when he submits his
claim for pension. If, however, he has paid contributions for more than 15 years, the amount of
pension payable will be increased by I per cent
for each full year beyond 15 years. The amount
of the disability pension will not, however, exceed
80 per cent of his income.
Old-Age Pension
The benefits provided under the old-age insurance are the old-age pension and a lump-sum payment. In order to be entitled to an old-age pension, a person must have completed his 60th year
period. Under the scheme, an insured woman who
has attained 40 years of age and an insured man
who has attained 45 years of age on the date on
which the scheme is put into force will be entitled to
receive old-age pension awarded to a person who has
paid contributions for at least 15 full years,
they
if
can establish that they have worked independently
in the course of the ten years preceding the date on
which this scheme was put into force and have paid
contributions for at least five full years after they
were covered by the scheme. They may not, however, be allowed, at the beginning, to declare a
higher income than 2400 liras which corresponds to
the eighth income category for
contribution
purposes.
An insured person of pensionable age who leaves his business but is not entitled to a pension will
have the right to receive, on a written claim, a
lump-sum payment corresponding to the total of
contributions paid by him.
Survivors' Pension
The benefits provided under the survivors' insurance consist of survivors' pension, lump-sum
payment and funeral expenses. The survivors eligible for benefits are the spouse, children and
parents. A survivor is entitled to a pension if the
deceased was receiving a disability or old-age pension or had paid contributions for at least three full
years before he died.
The amount of pension or lump-sum payment is
distributed among the survivors in the following
proportions :
(a) 50 per cent to the widow. This amount is
(man) and 55th year (woman) and have paid contriraised to 70 per cent if she has no child enbutions for at least 15 full years. The amount of
titled to a pension or a lump-sum paypension payable to an insured person is 70 per cent
ment.
of the income taken as the basis for contributions
(b) 50 per cent to the widower who, on the
at the time when he submits a claim for an old-age
death of his wife, was disabled to the expension. If, however, he has paid contributions for
tent of being unable to work, or had commore than 25 years, the amount of pension payable
pleted his 60th year and was dependent on
will be increased by I per cent for each year beyond
his insured wife. This amount is also raised
25 years. He will also be entitled to I per cent
to 70 per cent if he has no child entitled to
increase for each year beyond the pensionable age.
a pension or a lump-sum payment.
The amount of the old-age pension awarded to a
(c) 25 per cent to each child under 18, if receivperson will not, however, exceed 90 per cent of the
ing secondary school education, or 25 if reincome taken as the basis for contributions at the
ceiving a higher education. Children disatime when he submits his claim tbr pension.
bled to the extent of being unable to work,
and dependent unmarried daughters will,
The new scheme, with transitional provisions,
however, have the right to receive the penpermits the insured persons who are covered late in
sion or the lump-sum payment regardless of
their lives with relatively few years of insurance, to
their age.
qualify for an old-age pension during a limited
20
If a widow remarries, her pension will be suspended. If, however, the marriage which leads to
the suspension of the pension is dissolved, the pension will be reinstated. A widow who would become entitled to a second pension because of her
subsequent husband's death
will
have
the right to
receive the higher of the two pensions.
In the case of the death of an insured person or
a pensioner, a lumpsum payment will be made to
his family to cover the funeral expenses. This amount was fixed as I,000 TL which has been increased
to 1,500 TL.
Financing
The scheme is financed by contributions collected from the insured persons.
The rate of contribution payable by the insured
is 13 per cent of the amount of income declared. For the purpose of this scheme, monthly
income categories are established to be taken as the
person
basis for contributions.
The
insured person notifies, in writing, the
category of monthly income to be taken as the basis
for contributions within 30 days of his becoming
insured. If he does not notify within the 30-day
period, the first income category (4C0 TL) is taken
as the basis for contributions.
Ailministration
BAG-KUR is a self-governing agency but subject to the general supervision of the Ministry of
Social Security. Its accounts are subject to the control of the General Supervisory Committee.
The main organs of the Institutions are :
-Directorate-General
-Board of Managers
Assembly.
-General
The Institution was operated by a central office
upto 1976 in order to keep the administrative expenses at a minimum level. However, as a result of
significant extension of its activities and growing
needs, activities have started to open regional offices and provincial branches of Bag-Kur upon a
decision taken by the Board of Managers and the
approval of the Ministry of Social Security.
ministration in Turkey. So far, it has proved to be
successful since the number of registrations and the
amount of contributions collected are far above the
original estimates. Upto July 14, 1976, the number
ofregistrations exceeded 870 thousands. There are
250 thousand more self-employed persons who are
members of occupational organisations and have
not applied to BAG-KUR for membership. So the
number of insured persons has reached a total of
more than 1,200,000 persons. (Self-employed members of the occupational organisations are covered
by the scheme).
As regards the collection of contributions, mbre
than 70 per cent of the members are making their
payments regularly and the amount of payments has
reached 2,47 5,9 58.00 T L.
Total assets of BAG-KUR
follows (as of July 15, 1976) :
(a) Deposits :
Time Deposits
Demand Deposits
Total Deposits
are summarised
1,583,003,685
as
TL
19,447,954TL
1,602,451,640TL
(b) Credit extended:
Credit for business
establishment and
maintenance
Credit for the
624,3s4,043
TL
business sites
19,500,000
TL
Housing credits
Total credits
40,000,000
TL
construction of
(c) Government bonds
Total Assets
683,854,@3
TL
386.257,500
TL
2,672,563,t83
TL
Upto now 76 old age pensions and 23 disability
pensions have been awarded. Furthermore, dependants of 2068 deceased members have been benefitted by the survivors' pensions. Including lump-sum
payments, total insurance benefits have . reached 30
million TL paid to beneficiaries.
The administrative expenses have varied betI to 3 per cent of the general annual income
since the founding of the institutions, although
this margin can be increased up to l0 per cent
ween
according to law.
the
Owing to the extensive use of electronic data
processing facilities, detailed statistical data has
been obtained which is designed for utilisation in
actuarial calculations.
occupational associations, banks and post offices,
constitutes a new model for social insurance ad-
(From our correspondent Mrs. Tuncay Solak, Systems Analyst, Bag-Kur, Turkey).
Final Remarks
As mentioned above, collaboration with
2t
ISSA NEWS
Fourth Regional Conference for Asia and Oceanra
At the invitation of the Turkish member institutions, International Social Security Association is
organising, in Izmir (Turkey), from 25-29 April
19'77, its 4th Regional Conference for Asia and
Oceania.
The agenda of the Conference is as follows:
l. Developments and trends in Asian social
2.
3.
security schem es (197 0-19? 6) ;
The problems of rising health
care costs-
policies and measures to control increases
in expenditure;
Problems in the development of work injury insurance schemes, with particular
reference to the extension of coverage to
small-scale enterprises;
Meeting
Action designed to back unemployment insura-
nce by promoting employment
maintenance, the
development of family benefits legislation and the
improvement of reception facilities for insured
persons were among the subjects considered by the
permanent technical committees of the International Social Security Association.
There are at present ten permanent technical
committees set up by the ISSA to study the parti-
Public relation activities of social security
institutions.
In addition to the above items, the delegates to the
Conference will also be asked to make suggestions
and recommendations concerning the future programme of activities of the Association in the Asian
region for the period 1978-1980.
The meetings will be held at the Conference
Hall of the lzmir Chamber of Commerce, II.
Avenue
(II. Kordon).
ISSA hopes that member institutes in the region
send representative delegations and participate
in the deliberations of the Conference.
will
of the ISSA
TOPICAL PROBLEMS OF SOCIAL SECURITY
22
4.
Permanent Committees
in
Geneva
cular problems of each of the branches of social
security as well as technical, administrative and
legal questions that concern all social security institutions. The results of these committees' work are
submitted for consideration and approval by the
General Assembly of the ISSA, which normally
meets every three years.
Five Permanent Committees met at
quarters
the
head-
of the ILO in Geneva in the week from
27 September
to 1 October
1976.
The
agendas
of
these Committees were
lopment in different countries; achievements
of mutual benefit societies in the social field
and in the field of provident benefits.
as
follows:
insurance
and
employment
schemes of
protection against unemployment of measures
-Unemployment
maintenance: The promotion by
and Methods: Organisation of
-Organisation
services in contact with the public, introduction of appropriate facilities, effect of automation at this level.
aspects of social security: General prin-Legal
ciples on which the right to social security
and provisions designed to prevent unemployment or to eliminate existing unemployment;
structural improvement with a view to employment maintenance.
allowances: Trends in family benefits
legislation between 1964 and 1974,
benefits is based.
-Family
Benefit Societies: The role of mutual
-Mutual societies in economic and social devebenefit
Over 220 delegates from 52 countries in all regions of the world participated in the work of the
Permanent Committees.
Meeting
Thelnternational Social Security Association
has carried out the first international inquiry aimed
at establishing in what ways the rate of an old-age
pension may be affected by early or deferred pension claim and by the continuation of occupational
activity. This inquiry, which was conducted by
means of a questionnaire, met with considerable
interest, and the ISSA received 104 replies from
old-age insurance institutions in 48 countries.
The findings emerging from this inquiry
were
considered by the ISSA committee concerned with
this subject.
Two of the Association's Permanent Committees-the Committee on Old-age, Invalidity and
Survivors' Insurance and the Committee of
in
Stockholm
from 5 to 7 October 1976, at the invitation and
with the collaboration of the Swedish member
OLD AGE AND INVALIDITY INSURANCE
SCHEMES
of Actuaries and Statisticians-met
of ISSA Committees in
Stockholm
institutions of the ISSA.
The agenda of the Committee on Old-Age,
Invalidity and Survivors' also comprised two
in the definition of risk
old-age and invalidity insurance schemes and
problems arising from the low level of invalidity
other items, namely, trends
in
pensions.
In addition, the two Committees met together
in order to deal with the financial, economic and
social consequences of lowering the retirement
age.
The Committee of Actuaries and Statisticians
and financial projections in
studied demographic
social security.
About 160 delegates from about 40 countries
took part in the work of the Committee.
23
Meetings of ISSA Permanent Committees ln Vienna
EVALUATION OF HEALTH CARE COSTS
The International Social
SecurityAssociation
several years been concerned with the
problem of rising health care costs, a subject of
serious preoccupation for the institutions administering health care benefits. The Association bas,
therefore, assigned its Permanent Committee on
Medical Care and Sickness Insurance the task of
undertaking a study of the relationship between
trends in health expenditures, on the one hand, and
the system of financing and the type of organisation
ofhealth care on the other.
has
for
This question was examined by the Committee
during its meeting held in Vienna on 14 October
1976. The Committee was asked, more specifically, to consider a note prepared by the ISSA Secretariat on certain technical aspects of the proposed
study; this note also served to further orient the
discussion on the subject. In view of the particular
nature of this project, it was not considered appropriate to turn to a survey questionnaire to collect
the necessary information, but rather to enlist the
cooperation of national reporters to prepare, for a
limited number of countries, 'onational monographs" on the situation in their country. Following this procedure, the "national monographs" of
Austria and Finland were presented as pilot studies
at this meeting of the Committee.
Among the numerous variables which enter
into health care costs, some are quantifiable, while
others are clearly less susceptible to measurement.
The chief problem, consequently, is isolating the
factor of "type of organisation" from other influe-
ducive to a high degree of referrals to hospitals
and consequent increase in the cost of that sector.
Intensive study of these aspects was considered
worthwhile.
On the basis of the reports presented at the
meeting, the Committee discussed the next stage
to be carried out in this proposed study. It also
took up the discussion of another enquiry dealing
with a related question-the volume and cost of
sickness benefits in kind and in cash. This systematic enquiry has been conducted by the ISSA on
a periodic basis since 1958.
Compensation and Prevention of Work
Accidents
Two other ISSA Committees also met in Vienna
on l5 and l6 October 1976: Permanent Committee
on Insurance Against Employment Accidents and
Occupational Diseases and the Permanent Committee on the Prevention of Occupational
Risks.
The first of these Committees examined the
resultsof a survey, collected by means of a questionnaire, on an important legal problem for work
injury insurance schemes: pecuniary claims of
accident insurance carriers, whether public or
private, against third parties. This enquiry has
evoked considerable interest, as evidenced by the
fact that 55 countries have responded to the questionnaire, including a significant number of developing countries, which indicated that they are
studying and attempting to find new solutions to
this problem.
nces.
Among the questions studied, the note of the
ISSA Secretariat suggested that the terms on which
different forms of care are available to users (nopayment, cost-sharing, percentage of cost paid by
beneficiary, etc.) and the methods of payment to
providers (different ways of paying hospital care and
alternative systems for the remuneration of doctors)
might be seen as aspects of structure which have a
direct bearing on costs.
There
is a
hypothesis, for example, that feeto physicians tended to emphasise the ex-hospital sector and led to "overtreatment", while a salaried system might be confor-service payments
24
The Permanent Committee
for the
Prevention
of Occupational Risks had on its agenda the following two technical questions:
role of the prevention
-the
risks in the environment;
of occupational
problem of standardisation in the preven-the
tion of occupational risks.
For the first item, the Committee examined the
appropriate measures to be taken to protect workers against the risks which occur, not at the place
of work, but more generally in the environment.
This report is concerned with the risks arising from
the circumstances of nature (climate, natural cata-
etrophies) and from air pollution (e.g. chcmical
other forms
of air
pollutlon produced by
industries) as wetl as the various modes
portation.
and
nearby
of
ple, safety shoes, insulated gloves
work, helmets, masko etc.).
for
electrical
trans-
AU of these mectings of thc Permaneat ComCommittee was asked mittees were organised at thc invitation and with
to exchange points of view on the mcasures which the collaborstioo of the Federation of Austrian
could be taken td achieve a greater degree of uni- Social Insurance Institutes. Ths sessions were
formity in the standards used in different countries attcndcd by approximately 180 delegates from 40
for the individual protectio4 of workem (fior exam- difrerent countries.
On
the
second item,
the
25
ILO
NEWS
The Cost of Social Security, 1967-71
WESTERN EUROPE HAS HIGHEST SOCIAL
SECURITY SPENDING
Western Europe spends proportionately more on
social security than any other parts of the world,
according to figures just published by the International Labour Office.
They appear in "The cost of social security;
eighth international enquiry, 1967-'71" which gives
the results of inquiries in 7l countries into spending
under such headings as sickness, insurance, unem-
ployment, insurance and old-age, survivors' and
invalidity pensions.
Eleven Western European countries were devoting more than 15 per cent of gross domestic product to social security in l97l: Austria, Belgium,
Denmark, Finland, France, the Federal Republic
of Germany, Italy, Luxembourg, the Netherlands,
Norway and Sweden.
The leaders were the Netherlands (24.7 percent\
and Sweden (25.2, per cent). Both of these countries roughly doubled their social security spending,
in proportionate terms, during the decade up to
t971.
The countries with centrally planned economies
have achieved a certain stability in the resources
allocated .to social security-between l0 and l5
per cent of net material product, as a rule. Of
these countries, however, Czechoslovakiadevoted
18.1 per cent of net material product to social security in 1971.
In industrialised countries as a whole, more than
half the social insurance expenditure is for old age,
disability and death. The cost of medical care is
also a major item.
26
The developing countries of Africa, Asia and
Latin America present a different picture with most
of those surveyed devoting less than 5 per cent of
gross domestic product to social security, and with
only a modest rate of increase. These are, however,
usually new schemes which have yet to mature.
A
problem ofchoice
Social security is at a crossroads in many counis expected to translate social justice into
action, yet with more people needing help-such as
the unemployed and ageing populations-the costs
can be considerable, and these have to be weighed
against other potential uses of the available funds.
tries. It
Social security spending is already rising faster
than national income in many countries, and they
are watching the figures carefully.
The new ILO survey is intended to help policy
in the often difficult choice of options by
showing what happens in other parts of the world.
makers
Important role of private schemes
The survey contains a special supplement giving
data on occupational schemes in selected countries.
Such schemes, which are not included in the
periodic ILO inquiries, are playing an important
role in many countries.
To include them would be to increase the social
security portion of gross domestic product by between one-tenth and one-third.
Switzerland,
for example, would show a one-
third increase over the 12.6 per cent of gross domestic product devoted to social security in 1971.
APPOINTMENTS
Mr. Sita Ram Gope, as Commissioner, Coal Mines Provident Fund
Dr. Assad N. Aram, as Deputy Minister for Health and also in charge of
INDIA
IRAN
National
Health Insurance Organisation
Mr. R. Roter, as Director
ISRAEL
General, National Insurance Institute
ISSA CORRESPONDENTS
INDIA
Coal Mines Provident Fund
Mr. Sita Ram Gope in place of Mr. P. Lahiry
BOOKS AND PUBLICATIONS RECEIVED
AUSTRALIA
Department of Social Security
Annual Reports 1973-74;1974-75; and 1975-76
'Social Security-Quarterly-Summer 1975-76;
Autumn 1976 and Winterl976.
Medibank PamphletsMore than before now offers Private Health Insu-
rance-Medibank and You
How
to
is right
choose
for
the Health Insurance
Cover that
you
Indian Social Institute
Social Action Oct-Dec. '76
All India Management Association
Indian Management-October 1976 and, November 1976
Indian National Trade Union Congress
Indian Worker-Weekly-ll October 1976 todate.
ISRAEL
National Insurance Institute
Social Security No. l l, July 1976
INDIA
MALAYSIA
Assam Tea Plantations Provident Fund & Pension Scheme
Social Security Organisation
Annual Report 1974
Annual Report 1973-74
ILOIUNFPA Asian Regional
Employees' Provident Fund
National Specialists
You and Your Provident Fund and Pension
Coal Mines Provident Fund
Annual Report 1974-75
National Safety Council of India
Industrial Safety Chronicle Vol. No.
Sept. '76
VIII-July-
on
Symposium
of
Population Aspects of
Social Security
Emploees' Provident Fund
Brochure on 25th Anniversary of E.P. F.
TURKEY
Ordu Yardimlisma Kurumu
Brochure on 15th Anniversary
of OYAK-Intro-
ductory book
27