Self-financing security scheme

At present, uncertainty is the order of the day and no region is immune.

To combat economic uncertainties, developed countries have formulated social security schemes for citizens which provide some relief for affected people in such cases.

Developing countries either do not have similar schemes or the amount provided under the scheme, if any, is too meager to meet the basic needs of an individual.

Financing such schemes is the major hurdle for the authorities in planning the schemes, and the victims are often left to fend for themselves during a crisis.

I suggest a self-financing scheme which can provide a "security net" for an individual as follows:

* Each employee is made a permanent member of the "security scheme" irrespective of his position in the organization.

* A predetermined percentage, say 5 percent, is deducted every month from the salary of an individual and deposited in his security scheme account.

* Twenty-five percent of the annual increment is deducted and deposited in the member's account.

* Ten percent of the annual bonus is deducted and transferred to the account of the member every year.

Each member gets an interest rate 2 percent higher than the savings interest rate at the state bank and the interest earnings are free from taxation.

The member can increase the percentage of the deductions at their will. The member/family can withdraw the funds from the scheme in the following cases:

1. Retirement

2. Permanent disability

3. Loss of job

4. Death

The scheme will enhance savings, help in reducing inflation and provide a security net for individuals.

R.K. CHOPRA

Jakarta