The National Insurance Funds

UNDER Part III, sects. 35 and 36 of the National Insurance Act, I946, provision is made for the investment of funds accumulated under the new National Insurance scheme through the excess of contributions over benefits. Into the National Insurance Fund will be paid over all contributions by employers, employees and self-employed persons together with the Exchequer Supplement and any surplus will be invested by the National Debt Commissioners as directed by the Treasury. The latter is authorised by Parliament to invest these funds in savings bank funds. But quite apart from the National Insurance Fund, which is the working balance of the scheme, the Act by sect. 36 also brings into being another new fund known as the National Insurance (Reserve) Fund. Into it will be paid over not only any surplus from the working balance but also all the assets of the various state insurance and pensions schemes in operation before the passing of the Act and which are now superseded by the new scheme. The transferred funds are listed in the Tenth Schedule of the Act. They include the Unemployment Fund set up under the Unemployment Insurance Act, I935, the various Health Insurance Funds and Pension Accounts, in all some 13 separate funds authorised by legislation within the last I2 years. Apart from these assets, the Reserve Fund will take over all assets of Approved Societies which are attributable to business under the enactments repealed by this Act or under corresponding enactments previously repealed . Figures of the total assets transferred are not yet available but the total of securities held by the Health Insurance Funds and by the Unemployment Fund on July 4th, I948, amounted to approximately t723 mi.1 (cf. Table I below). The first important change in financial administration has thus introduced considerable simplification. It will no longer be necessary to audit a large number of separate accounts set up under a long series of Acts. Secondly, the pooling of reserves will allow a greater flexibility in financial policy. The second major change in financial administration is in the control of the funds themselves. Prior to the passing of the Act, control of

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