Sri Lanka’s Farmers Pension Scheme, in existence since 1987, collapsed this week following a Treasury decision to stop releasing money due to a lack of funds, Finance Ministry sources said.
This decision was conveyed to all post offices entrusted with the task of paying pensions to eligible farmers. The pension for farmers was paid from the fund set up for this purpose in accordance with the Farmers Pension Act No. 12 of 1987.
However since 2009 the finances of the pension fund has dwindled owing to corrupt practices and financial misappropriations, the Auditor General’s Report said.
Earlier the Treasury had to provide Rs.150 million monthly for farmers pensions, as there was insufficient money in the fund. A senior official of the Finance Ministry noted that the Treasury has taken over the functions of this scheme from the Agriculture and Agrarian Insurance Board as the fund was not properly managed. In June 2011, the government allocated another sum of Rs. 317 million to enable the fund to continue the pensions.
However the Treasury had to suspend the payment with effect from this month as the financial position of the Fund had further deteriorated.
More than 900,000 farmers are members of the scheme and around 100,000 of them are receiving pensions from the fund. Farmers and agriculture workers who contribute to the pension scheme are entitled to a monthly pension from Rs.1,000 up to Rs. 4,166. |
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