With the objective of introducing a pension scheme for private sector employees, the Government is considering a proposal to bring the Employees Provident Fund (EPF) and Employees Trust Fund (ETF) under the Treasury, a Cabinet minister said. Labour Minister W.D.J. Seneviratne told the Sunday Times the proposal to formulate a private sector pension scheme was under discussion after bringing the EPF and ETF under the Treasury.
He said the proposal was to have a contributory pension scheme similar to what has been proposed for public sector employees.
For the private sector, a fund would be set up to support the pension scheme while part of the funds would be made available as housing loans for EPF/ETF contributors, the minister explained. But the amount given as housing loans would be cut down from the current 75 percent to 30 percent because the Government wanted to ensure that the employees received a sufficient amount after retirement.
A Finance Ministry official said that under this scheme, the private sector would be given the option to fix the retirement age according to their wish.
He said another model under study was to release the EPF money in stages after retirement. The Government was also studying various investment plans to increase profits gained from the EPF/ETF funds
Minister Seneviratne said the Government would introduce the proposal as a bill, after discussions were completed. The EPF, Sri Lanka’s largest social security scheme, had assets upto Rs. 1,665 billion at the end of last year. The EPF is now managed by a unit in the Central Bank.
The ETF as at end of last year was Rs. 218.5 billion with 2.5 million active members. It is now managed by the National Policies and Economic Affairs Ministry which is under the Prime Minister.
In 2011, the former government proposed a pension scheme for the private sector, but the plan was shelved after protests by unions which claimed that the EPF and ETF would be affected.
(The Sunday Times – By Damith Wickremasekara)