Existing social security and pension schemes need to be converted to one system – Labour Chief

„Only 45-50% of working population covered by existing schemes

Sri Lanka needs to review the existing social security and pension schemes and convert it to one system to encourage employees to save, as only 45-50 percent of labourers are covered by the current schemes, the Commissioner General of Labour, R. P. A. Wimalaweera asserted.

Joining a panel discussion at the 2018 edition of the annual symposium of the Employers’ Federation of Ceylon (EFC) in Colombo last Friday, Wimalaweera said, “We have to convert the various social security and pension systems to one, to which people can continue saving.”

He highlighted that the current EPF/ETF system doesn’t provide necessary social protection for workers, in particular for employment with low wages.

He pointed out that these workers, once retire tend to withdraw the full amount in these accounts, while these funds are also not sufficient to continue their livelihoods.

According to Wimalaweera, EPF/ ETF covers around 2.6 million of the working population while 1.5 million public sector employees are covered by State pension schemes. In addition, there are various insurance and pension schemes for the farming, fisheries communities etc.

He noted that altogether around 45-50 percent of the working population in the country is covered by various schemes.

Sri Lanka’s working population in the informal sector, which contributes for over 50 percent of the GDP, is yet to be covered under a social protection scheme.

Wimalaweera stressed that the government should create an enabling environment where the working population could continue to save beyond their retirement age, even sans the contributions of their employers.

The United Nations (UN) has estimated that one out of every four persons will be an elderly person in Sri Lanka by 2041.

The experts have pointed out that the available social protection schemes are limited in coverage, but also inadequate as the value of these schemes declines along with inflation.

As a developing nation with a rapidly ageing population, Sri Lanka is expected to face challenges in providing care for the elderly population. The Bloomberg Sunset Index in 2016 has named Sri Lanka as one of the countries having a higher risk from an aging population.

The index also noted that Sri Lanka needed 2.3 workers to support each senior citizen currently.

Joining the panel discussion, Sri Lanka Nidahas Sevaka Sangamaya, General Secretary, Leslie Devendra said that trade unions are struggling to reach out to workers in the informal sector and other emerging sectors, which has resulted in reducing trade unions’ bargain power.

He noted that the trade union density has recently come down to 9 percent of the total workforce.

“The trade union movement in Sri Lanka is not adjusting what the future holds. The unions are losing their bargain power,” he stressed.

However, Devendra said that trade unions have made some progress in approaching sub-contract workers and defending their rights.

He emphasised that defending rights of unaccounted workers remains a challenge as they don’t have employers.

“The police, local government, local thugs etc are the people that we have to bargain with. We don’t know how to bargain with them. We are also going through a learning process,” he said.

Speaking of introducing a flexible and part-time work management system, Wimalaweera said the government needs to change the existing labour laws in order to regulate this type of working environments.

However, he pointed out that a virtual working environment where sometimes the employer/payment provider is located overseas, poses challenges in terms of assuring the payment security for employees. (NF)