‘Private pension scheme, a boon’

Chaminda Perera

*Will benefit tens of thousands of employees

*Fund managed by Central Bank, monitored by Labour Ministry

*Scheme will not deprive employees’ rights, entitlements

Top state officials and trade union leaders asserted that the proposed private sector pension scheme will not leave the employees in the lurch without a proper source of income in the latter stages of their lives. They noted that private sector employees will be entitled to a regular source of income after their retirement, in addition to their EPF and ETF benefits.

They added that private sector employees are compelled to spend their EPF and ETF funds for family commitments and face misery without a proper income for survival in their twilight years.

Labour Ministry Secretary Upali Wijeweera yesterday told the Daily News that certain political parties are trying to take petty advantage by disseminating false information about the proposed scheme to the public. He said these elements were trying to mould a public opinion by carrying out an adverse campaign about this pension scheme which would benefit tens of thousands of employees if it is implemented. Wijeweera added that this fund is managed by the Central Bank and monitored by the Labour Ministry. He said that no additional administrative charges would be levied from the beneficiaries.

SLFP Trade Union General Secretary Leslie Devendra yesterday said the private pension scheme was not proposed by the President or the Cabinet of Ministers.

He added that it was proposed by the working masses themselves.

He added that thousands of government servants benefited from the government pension scheme introduced by former Minister T B Illangaratne in 1958.

Devendra said that private sector employees are entitled to 90 percent of the EPF and ETF funds and the monthly pension.

“After 52 years, the working masses are faced with different economic challenges at the age of retirement. They have increased family commitments and are pressed for money,” he said.

He added that Sri Lanka’s population is aging and this aging population should be looked after.

Devendra noted that the JVP and the UNP leaders are in the practice of misleading the public and the working masses over this pension scheme. “They are engaged in a futile effort to deprive the working masses of the benefits ensured by this pension scheme,” he added.

Ceylon Federation of Labour Assistant Secretary H A Piyadasa said the proposed pension scheme has been designed by the government with a good intention of ensuring the future of retirees.

He said the proposed scheme will not deprive the employees any of their rights nor their entitlements from the EPF or ETF.

Meanwhile, the government yesterday reiterated that over 13.3 million account holders in the EPF account will continue to have the right of withdrawing their balance from the EPF at the time of retirement at the age of 60. Likewise the benefits of ETF fund will also be available unhindered to its members.

Despite the introduction of this new pension scheme for employees of the private sector and the public enterprises, the government will continue to maintain the EPF and ETF accounts with the contribution of both employers and employees. Employees will continue to enjoy withdrawal of their money from both EPF and ETF accounts as usual in the future too.

Both the employer and employee will have to contribute two percent of the employee’s salary to the new pension scheme and at the time an employee withdraws his or her EPF fund after retirement only two percent from that fund will be retained for the proposed new pension fund.

In accordance with the new pension scheme, an employee will be eligible for a pension when he reaches the age of 60 with a minimum contribution of 10 years to the fund. Accordingly, an employee who has contributed for 10-20 years will be entitled for a pension amounting to 15 percent of the salary while an employee who has contributed for a period of 20-30 years will be entitled for 30 percent of the salary. Sixty percent of the salary will be paid for an employee who has contributed for more than 30 years. Employees will be entitled to receive the pensions until the time of death.

In spite of the implementation of the proposed pension scheme, the employees will continue to enjoy the benefits from EPF and ETF funds while in service. A contributing member of EPF has the ability to obtain property or housing loans as usual equal to 75 percent of the EPF account balance, while obtaining other facilities such as scholarship assistance from the ETF for their children.

At the time the EPF was introduced, the government’s intention was to provide the employee better retirement benefits.

But surveys reveal that due to the socio-economic trends in the country, most employees retire at the age of 60 with a host of unresolved burdens.

Accordingly, most of the retirees are compelled to use the EPF money for their family commitments and because of this situation most employees are left in the lurch without any proper avenues for their survival during the twilight years after retirement. The proposed new pension scheme introduced by the government with good intention will help the employees to enjoy a continuous retirement benefit in addition to their EPF and ETF entitlements.