• EPF unchanged, separate pension scheme under discussion: Dep. Min.

Trade unions have raised concerns over reports suggesting that the Government plans to convert the Employees’ Provident Fund (EPF) into a pension scheme, warning that such a move could undermine workers’ control over their own savings.

Union leaders stress that while they are not opposed to pension schemes in principle, they firmly reject any compulsory linking of the EPF to such a system, citing past attempts that were withdrawn following widespread protests.

Speaking to The Sunday Morning, Free Trade Zones and General Services Employees’ Union General Secretary Anton Marcus noted that a similar idea had been proposed in 2011 by the then Government, which trade unions had strongly opposed.

He explained that private sector workers were not against a pension scheme, but that they were against using the EPF for this scheme. 

“If the EPF were to be linked to a pension scheme, it should be on a voluntary basis and not compulsory. Back then, it was compulsory, which was why the Government had to withdraw it following protests of workers,” he charged.

Meanwhile, Ceylon Mercantile, Industrial, and General Workers’ Union General Secretary S.P. Nathan told The Sunday Morning that the EPF should be available to workers to use as they wished.

“When some workers get a lump sum, they make their own investments or use it to improve their living standards,” he said.

Nathan expressed concerns over placing EPF funds under ministerial administrative control should it be converted into a pension scheme, saying that it may limit workers’ control over their own savings.

“If the funds were to be directly operated under a ministry and the minister were given greater authority, workers would naturally be concerned that these funds might be directed towards other State requirements rather than worker-focused needs,” he stated.

Nathan also proposed utilising unclaimed and extra EPF funds to develop housing schemes for workers, particularly those who lived in under-facilitated and overcrowded boarding houses.

“Many workers reside in boarding places without even basic facilities like water, space, and security, especially women and workers coming from distant parts of the country,” he said.

He also shared that he had formally submitted a proposal to the Government and had written to the Prime Minister, but was yet to receive a response.

“There are huge amounts of EPF funds remaining unclaimed. Before allocating the funds to some other project, they should be used to benefit workers as workers are the owners of the EPF,” he emphasised.

These concerns arose following a statement made by Deputy Minister of Labour Mahinda Jayasinghe in Parliament on 6 January, when he responded to a question raised by Parliamentarian Oshani Umanga.

Responding to allegations, Deputy Minister Jayasinghe clarified that no reforms would be undertaken to the EPF. 

He noted that the ministry’s attention was directed towards introducing a pension scheme for semi-Government and private sector workers, and that new changes or decisions would not be taken without consultation with trade unions.

Speaking to The Sunday Morning, Jayasinghe said that the EPF had been established to safeguard the social security of private sector workers after retirement, but added that this objective was not being met due to withdrawal provisions.

“Workers have the ability to withdraw 30% of their EPF savings every 10 years. Because of this, the purpose of social security after retirement is compromised,” he said.

Jayasinghe stated that only preliminary level discussions had been undertaken regarding the private sector pension scheme.

“We are paying attention to the idea of bringing a pension scheme for private sector workers,” he stated.

He further clarified that no reforms or changes would be done to the EPF. “There will be no reforms to the EPF; it will continue as it is,” he assured.

“If new changes are to be introduced, we will definitely consult the National Labour Advisory Council (NLAC) and the unions,” he added.

The EPF is the country’s largest social security scheme with an asset value of Rs. 4.4 trillion as of the end of 2024.