CH:5 Benefit overview & providers of benefits

Question 1

Main PROVIDERS of benefits

(5)

Answer 1

• State
• Employer
• Individuals
• Financial institutions
• Other corporations

Question 2

What are the main objectives of the STATE

(12)

Answer 2

• Provide for those unable to provide for themselves (minimum standard)
• Redistribution of wealth
• Paternalism
• To ensure that the population understands the benefits of education, e.g., regulate minimum level of information be disclosed when signing up for benefits
• Reduce burden on State, through encouragement of compelling private provision
• Stimulate savings and investment -> stimulate the macroeconomy
• Stable / predictable costs
• Simple scheme (low cost administration and easy to understand)
• Minimise fraud
• Avoid bureaucracy
• Positive macroeconomic effect
• Popularity with voters and employers

Question 3

What are the main objectives of the EMPLOYERS

(9)

Answer 3

• Be paternalistic
• Attract and retain staff, e.g., attractive benefits compared to competitors
• Reward certain staff e.g., high fliers, long servers
• Comply with legislation
• Control costs – affordability of contributions, stability, predictability, flexibility
• Offer benefits that are simple to understand and administer
• Take advantage of tax breaks
• Pool resources and expertise, e.g., multi-layer employers schemes
• Pooling of expenses / expertise
• Encourage employee provision, through matching constribution