Private sector pension scheme:

Retirees’ future secured

The private sector pension scheme is a proposal made with good intentions to safeguard the future of retired employees. Workers in the private sector totalling about 13.3 million will not lose their EPF or ETF benefits on account of it the government has emphasised, said a communique issued by the Government Information Department yesterday.

The present contribution of 8 percent and 12 percent of the employees salary contributed by the employee and employer respectively, will be continued in future too without a change, the communique added. The communique said that part of the income derived by investing EPF money in government approved sectors will also be credited to the workers’ accounts and the right of employees to withdraw money lying to his or her credit in the EPF and ETF accounts will remain unchanged as before.

The communique further added that a sum equivalent to two percent of the worker salary will be charged from both the employee and the employer to the proposed pension fund for which another two percent from the EPF fund lying to the credit of the employee would be charged for it on the eve of retirement from service.

Under the new pension scheme an employee will be entitled to pension benefits in reaching 60 years age. While the employee had to contribute to the pension fund for a minimum of 10 years. An employee who had made contributions for a period of 10 to 20 years will be entitled to a pension equivalent to 15 percent of salary and an employee who had contributed for 20-30 years will receive 30 percent of salary as pension. A person who had contributed for more than 30 years will receive 60 percent of the salary as pension for life. Despite the new pension scheme employees will be entitled to seek housing and property loans as before by keeping EPF funds as collateral as before and gain scholarships and other benefits granted to children of ETF members as before.

The government has obtained cabinet approval to allocate Rs 1,000 million as initial capital to the proposed pension fund.

In keeping with the court decision the government has taken steps to amend the draft pension bill to make the payment of pension mandatory to employees for life. The communique said adding that employees should not believe opposition’s malicious propaganda and entertain any fears about the proposed pension scheme.