The government has initiated what could become one of the most significant reforms of Sri Lanka’s social security system in decades by appointing a Senior Officials’ Committee to examine the feasibility of bringing the Employees’ Provident Fund (EPF) and the Employees’ Trust Fund (ETF) under a unified tripartite governance framework representing the government, employers and employees.
Cabinet approval was granted following a proposal submitted by the Minister of Labour. According to Cabinet Spokesman and Minister Dr. Nalinda Jayatissa, the committee has been mandated to study whether the two institutions could operate under a common governance structure based on internationally recognised principles promoted by the International Labour Organization (ILO).
He stressed that the committee has been appointed only to examine the feasibility of the proposal, and no final decision has been taken to merge the two funds.
The official Cabinet statement notes that the EPF, established under the Employees’ Provident Fund Act No. 15 of 1958, has more than 2.5 million members and assets exceeding Rs. 4.9 trillion, making it Sri Lanka’s largest social security fund.
Custody of the fund, investment management, financial administration and payment of benefits are currently handled by the Central Bank of Sri Lanka, while the Department of Labour is responsible for member registration, employer compliance, recovery of arrears and safeguarding employee rights.
The ETF, created under Act No. 46 of 1980, is administered by a tripartite board comprising representatives of the government, employers and employees. It manages assets of approximately Rs. 637 billion and provides coverage to more than 2.5 million active members.
The Cabinet paper highlights that tripartite governance of social security institutions is an internationally recognised best practice and a fundamental principle promoted by the ILO, which forms the basis for examining a common governance model for both funds.
The proposal is expected to attract close scrutiny from the business community, trade unions and financial market participants, given that the combined assets of the EPF and ETF exceed Rs. 5.5 trillion, making them among the country’s largest institutional investors.
Economists note that any governance reforms should strengthen transparency, accountability, professional investment management and public confidence while safeguarding workers’ retirement savings.
By Ifham Nizam
from The Island https://ift.tt/CdHamf7
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