Business Times

EPF amendments without proper consultations with stakeholders : Union

Unions are complaining about a unilateral decision by Labour Minister Gamini Lokuge to amend the Employees Providend Fund (EPF) Act and allow pre-retirement withdrawals without consulting the National Labour Advisory Council (NLAC).

In a letter to the Minister, the Ceylon Federation of Labour (CFL) said despite assurances given at the last meeting of the NLAC that an opportunity would be provided to the NLAC to discuss these issues, the Minister had gone ahead and got cabinet approval of the proposals.

“This is most unsatisfactory and we lodge our strong protest against your cavalier attitude towards the NLAC and wish to place on record our objections to the amending Act,” the CFL said. The old-established union said the original objective of the EPF to provide a tax free benefit for the individual worker at retirement should not be tampered with in any reform of the EPF but it ‘appears that your amendments allow too many pre-retirement withdrawals.”

It said the union was not opposed to stipulated withdrawal for housing purpose but were not in favour of the allocation of EPF funds to build an ostentatious secretariat and urged the Minister to find other means to fund projects of this type.

“The proposal to allow withdrawals in respect of medical wants is not welcomed as it overlaps with the medical facilities provided by the Employees Trust Fund (ETF). We suggest that the medical benefits proposed by you be undertaken by the ETF by widening the scope of the medical benefits offered by them at present,” it said.

The CFL said the proposals to have an insurance and pension scheme built into the EPF was ill conceived and these are best operated as separate schemes outside the EPF. “Whilst the CFL appreciates your desire to being additional benefits to the members of the EPF the ill conceived manner you are pursuing the matter leaves much to be desired. We would urge you not to introduce any proposals that would eat into the balance of members of the EPF and ultimately leave only a meager sum at retirement to the individual,” it said.

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