Independent public trust to manage state pension funds

Amidst growing protests from trade unionists and opposition politicians, the government is gradually going ahead with employees' retirement benefit reforms.

The Employees’ Provident Fund ( EPF), Employees’ Trust Fund (ETF) and the government pension scheme will undergo drastic changes under this initiative phase by phase.

These reforms are aimed at improving the efficiency of management in the EPF, ETF and deliver pension for life for public and private sector employees, official sources disclosed.

The state will introduce necessary regulations to set up a public trust to independently manage the ETF and EPF by amalgamating them to create a new national pension fund with a value of Rs. 1.88 trillion, a senior Treasury official said adding that this was announced in the 2017 budget as well.

However any changes to these funds should be made in consultations compromise and consensus with private sector employees, Anton Marcus, Joint Secretary of the Free Trade Zones and General Services Employees Union told the Business Times.

He noted that the government is planning to bring regulations one by one gradually to gain their objective but trade unions will keep an eye on each and every new development in matters relating EPF and ETF.

L ab o u r M i n i s t e r Jo h n Seneviratne has told the National Labour Advisory Council (NLAC) meeting recently that the regulation to amalgamate the EPF and ETF has not been devised as yet, Mr. Marcus disclosed.

He noted that trade unions are in one voice against any attempt to introduce contributory pension scheme for the private sector creating a new national pension fund.

Mr. Marcus emphasised that trade unions will agitate for a referendum if the government plans to go ahead with this proposal.

The Finance Ministry will initiate a process to streamline all databases maintained by the EPF, ETF and the Labour Department, together, with the proposed Central Pension Fund as a major step towards retirement benefit reforms.

This was like preparing the ground work gradually for the amalgamation of the two funds, he pointed out adding that this was brought to the notice of the Labour Minister at the NLAC meeting recently.

A new legislation on the regulation of superannuation funds other than the EPF and ETF is to be introduced providing provisions to set up a regulatory body towards this end.