Nine percent of Lankan population over sixty- HelpAge report

Nadira Gunatilleke

Sri Lanka’s population is ageing rapidly, People over 60 years of age comprise 9 per cent of the population and this figure will reach 25 per cent (5.4 million) by 2041. Persons who are above the age of 75 are projected to increase from 400,000 in 2001 to 1.7 million in 2041. A universal pension (a pension for all Sri Lankans) is both affordable and feasible in Sri Lanka with no need for targeting.

It is cleared that the existing pension system in Sri Lanka is severely flawed. Even if the existing pension schemes were improved, they would still not be able to provide a guaranteed minimum income for all older people in particular those living in poverty, a latest report released by HelpAge Sri Lanka says.

The report which is based on a recent study conducted in Sri Lanka was prepared for HelpAge International on behalf of HelpAge Sri Lanka by Dr.Larry Willmore of the International Institute for Applied Systems Analysis (IIASA) and Dr.Stephen Kidd, Director of Policy and Communications at HelpAge International, London, UK.

According to this latest report Sri Lanka’s population is ageing rapidly. Older people are likely to become a more powerful force politically in the next few years. It is essential that an effective pension system – based on the foundation pillar of a universal pension – is put in place as soon as possible. International experience indicates that a universal pension scheme is relatively simple to put in place and, once established, is very simple to administer. The impacts of such pensions on the lives of older people are significant.

The study proposes a level of cash benefit for a universal pension in Sri Lanka at the national poverty line, currently around Rs. 2,950 (US $ 27) per month. The study estimates the cost of a pension for four qualifying ages: 60, 65, 70 and 75 years.

Estimates indicate that the cost of providing a pension to everyone in Sri Lanka above the age of 70 would be 0.8 per cent of GDP. The study also indicates that a pension for everyone over 60 would cost 1.8 per cent of GDP, for those over 65 it would be 1.2 per cent of GDP and for over 75s it would be 0.4 per cent of GDP.

A number of countries both developed and developing have put in place universal pension schemes. The first country to do so was New Zealand in 1940 but since then, a range of countries as diverse as Mauritius, Nepal, Namibia, Bolivia and Kosovo have established similar schemes.

Evidence indicates that these pension schemes have been very successful in tackling old age poverty. They are very simple to administer and are politically popular.