342

APPENDIX A.

I

will permit of the increase of the sickness benefit of Class K to the ordinary
rate (12s. a week), subject to the limit on the period of benefit being
retained at six weeks.
As regards (h)—unemployment—the position at the present time is
abnormal, and, after full consideration, we have made the same allowances
as are provided in the present financial basis.
In regard to (k)—the provision to be made for expenses of administration—we
 have estimated the liability on the basis of the allowances
provided by the present regulations, viz., 4s. 5d. per insured person
per annum to the age of 65 for the expenses of Approved Societies and
6d. per insured person per annum throughout life for the expenses of
Insurance Committees.

Errect or THE CHANGE OF BAsIs.

95. The effect of the several changes in the basis which we have adopted,
as detailed in the foregoing paragraphs, is to reduce the weekly contribntion
 for seven-ninths of the benefits, as computed for an entrant at the
age of 16, to the following extent.
In the case of men from 7'44d. to 655d.
In the case of women from 7-20d. to 6:85d.
The respective differences between these rates, ‘89d. a week in the case
of men and ‘35d. a week in the case of women are available for the
purposes which the Royal Commission may recommend. It will be
observed that although the rate of sickness benefit is lower in the case
of a woman than in that of a man, and although there are other
important differences, tending in the same direction, between the ingurance
 conditions of the sexes, the contribution required at the age of 16
on the new basis is greater in the case of a woman than it is in the
case of a man. This is the direct consequence of the heavier sickness
and disablement claims among women for which, in view of the facts
brought out by the investigation, we have felt compelled to make
provision.
96. We pointed out in para. 2 that it was to be expected that any
change in the rate of contribution appropriate to an entrant at the
age of 16 would be accompanied by an alteration in the reserves required
to be held by the Approved Societies and that a resultant change was
to be anticipated in the part of the contributions (men 1d. a week, women
2d. a week) allotted to the service of reserve values. We now proceed
to investigate this question.
We find that the effect of the change of basis is to reduce the reserves
required by the Approved Societies by approximately £9,000,000. This
amount falls, therefore, to be deducted from the sum of the reserve
values credited to the societies at 31st December, 1926, assuming this to
he the date at which the new conditions will be applied.
After giving effect to the changes required hy the Contributory Pensions
Act,* the aggregate amount of the reserve values on the present basis
at this date is estimated, we are informed, to be about £61,000,000.
The change of basis reduces this sum to £52,000,000. Another point,
however, now arises. The regulations governing the Reserve Suspense
Fund require the balances from time to time to the credit of this Fund,
so far as they consist of reserve values, to be cancelled, and so far as they
consist of actual money to be applied to the redemption of reserve values.
We understand that no operations under these regulations have yet been
carried through and that, assuming the balances of the Reserve Suspense
Fund to be accumulated to 31st December, 1926, they are likely to
amount, after providing for certain incumbent charges, to about
£17.000.000. of which about £10.000.000 will be represented by reserve

* See Cmd. 2406. para. 29.