The Central Bank of Sri Lanka (CBSL) has already intervened for the discrepancies in beneficial interest rates in Employees Provident Fund (EPF), Central Bank Employees Provident Fund and Employees Trust Fund (ETF), said State Minister of Finance Shehan Semasinghe in Parliament yesterday (7). 

He made these remarks in response to the inquiry made by the Member of Parliament Gevindu Cumaratunga on the justification behind the different treatment for the private sector employees and the Central Bank employees in the beneficial interests in respective employee provident funds. Cumaratunga questioned, “Why is the EPF for the private sector more than 3 times lower to  that of the Central Bank officers?”

MP Cumaratunga initially inquired the State Minister Semamsinghe himself on the current beneficial interest rates provided for the EPF, Central Bank EPF and the ETF to which State Minister Semasinghe responded as 9% for EPF, CBSL EPF is at 29.27% and ETF is 8.75%, respectively. 

According to the EPF Act, an employee contributes a minimum of 8% and the employer a minimum of 12% respectively  of the total earning of the employee’s monthly salary. Employee’s EPF balance grows as employees mature in their working environments. Thus, the cumulative balance in their EPF account  is invested in treasury bonds, treasury bills, equity securities and corporate debt securities and money market instruments, which is maintained by the Central Bank. Depending on the rate of return, an annual interest rate is declared and credited to employees’ accounts. 

Per the Central Bank, EPF is the largest social security scheme in Sri Lanka which exceeds Rs.2,814 billion of assets as at end 2020.