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Pension scheme for private sector employees in the offing

Pension scheme for private sector employees in the offing

A proposal will be made to devise a private sector contributory pension scheme bringing the Employees Provident Fund (EPF) and Employees Trust Fund (ETF) under the treasury to prevent the misusing of funds such as pumping and dumping and bond deals.

EPF is the largest social security scheme in Sri Lanka, with a current asset base of 1.35 trillion rupees and 2.5 million active accounts. But it cannot be considered a pension scheme as it is not an annuity.

The EPF or ETF in its current form cannot be considered a pension scheme. Therefore, if both funds are going to be merged to provide a pension for life, the fund needs major reform and must be taken out from the Central Bank..

In Sri Lanka, 85 percent of the population between the ages of 20 and 59 are not covered by a pension scheme, and only 30 percent of the population above the age of 60 gets a pension that helps them to make ends meet.

Any new Pension scheme must be contributory and sustainable as the public sector pension system is mostly unfunded.

There are 24 income support schemes, which include the state’s Public Service Pension Scheme (PSPS) and the private sector’s Employee Provident Fund (EPF). There are also contributory pension schemes for the informal sector workers, which include the Farmers Pension and Social Security Benefit Scheme (FMPS), Fishermen’s Pension and Social Security Benefit Scheme (FSHPS) and the Self-employed Persons Pension Scheme (SPPS).

Other than for these there is a Public Assistance Monthly Allowance (PAMA), which provides an allowance to households whose monthly income falls below a minimum amount.

(LI NEWS)

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