Pension plus EPF for private sector workers

By Nadia Fazlulhaq

Private Sector employees will receive a pension in addition to their Employees Provident Fund (EPF) in terms of a new law, a senior government official said yesterday.

Labour Ministry Secretary Mahinda Madihahewa told Sunday Times that amendments would be introduced this month to the existing EPF (amended) Act of 1975 whereby private sector employers will be requested to introduce a pension scheme for their employees.

“EPF is not a retirement pension and as it is received in a lump sum therefore it is often utilised immediately. It is not a lifelong source of investment. In addition to the EPF, the new pension scheme will provide more benefits,” he said.

According to the Central Bank, the EPF had 11.3 million subscribers at the end of 2006. About 13 million people comprising two thirds of Sri Lankas population are in the working age group of between 18-65 years. About six percent of them are public servants who are eligible to life long pension.

According to the Social Services Ministry’s National Secretariat for, Sri Lanka ranks high among the countries which have a growing number of people above the age of 70. By 2025, some 25 percent of the population will be above the age of 60.

Social Services Ministry Secretary V. Jegarasasingham said that more than 50 percent of the working people had not planned for their retirement.

“It is important that the senior citizens are financially stable rather than being dependant on their family member or others,” she said.

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