The Insurance Board of Sri Lanka (IBSL) is planning to amend the law in a bid to bring Commissioner of Labour-approved superannuation (pension) funds under the IBSL and regulate them.
“The draft law is with IBSL and they are awaiting two board members to be appointed to the IBSL board so that they will have the necessary quorum to approve it,” an IBSL official said, adding that all necessary amendments were drafted and sent to the IBSL in February by the Central Bank (CB), which initiated this move.
He added that the CB has concluded that fund managers of a life insurance fund are similar to fund managers of a superannuation fund. “This was done in a bid to better regulate these funds, while paving the way for these to be invested in the capital market,” the official said.
Presently, there are about 170 such private provident and pension funds with about 150,000 members and assets amounting to nearly Rs. 125 billion, registered with the Commissioner of Labour.
“Although these funds are regulated by the Commissioner, the supervision does not include prudential rules and guidelines. The absence of a regulatory and supervisory system for pension funds has been identified as one of the gaps in the regulation of the financial system,” the official added. All commercial banks, Unilevers, Sri Lanka Telecom and Mercantile Sector Provident Funds Society, John Keells Holdings have some of these funds. |
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