• Labour authorities obtain NLAC approval for proposals 
• Documentation related requirements to be removed

The Labour Ministry has submitted a set of progressive recommendations to the National Labour Advisory Council (NLAC) aimed at improving conditions for Employees' Provident Fund (EPF) holders.

Speaking to The Daily Morning yesterday (19), the Ministry Secretary S.M. Piyatissa detailed the proposals, which have already received approval from the Council as the Government seeks to streamline access to EPF benefits and reduce bureaucratic hurdles.

Under current regulations, EPF holders are entitled to a 30 per cent loan payable in two installments, permitted for specific purposes such as medical treatment, land purchases, or educational needs. However, he noted that economic pressures have driven many individuals to seek these loans for reasons other than those stipulated, inadvertently falling victim to bureaucratic red tape. "Because they must provide documents to prove these needs, people are forced to use mediators to create these documents," he explained. "For these mediators alone, they have to pay. Sometimes, those taking a loan of Rs. 150,000 pay around Rs. 40,000 just for these documents. This is a mafia that exploits these people." To address this issue, the Ministry has proposed removing the document submission requirement entirely, allowing members to access their loans without needing to justify the purpose.

The Ministry has also suggested reforms regarding women accessing their EPF upon marriage. Currently, female employees must submit a letter of resignation to withdraw their funds. However, many later rejoin the workforce, which adversely affects their gratuity and promotional opportunities, as they are treated as new employees. "We have suggested that we can give them the EPF without submitting the said letter," he said.

Additional recommendations include changes for employees aged 55, who are currently entitled to withdraw their EPF in full. The Ministry noted that many return to work after withdrawal, and that some employers have been accused of requesting resignation letters with promises of rehiring that are not always honoured. "We requested that they not be required to end their employment by that time," he added.

The Ministry has further proposed revising the withdrawal frequency from the current five-year intervals to one-year intervals for employees aged 55 and above, allowing them to access their funds annually until the age 60 and beyond. 

The Ministry has also recommended establishing a committee that includes employer’s representatives to ensure that all stakeholders have input in future Fund improvements. "Even though it is the employee and the employer that are beneficiaries of the Fund, we should be taking their suggestions as well in doing further changes or improvements," he noted.

The NLAC operates as a tripartite organisation comprising representatives from the Government, the trade unions, and employers. The Government typically consults the Council before implementing decisions affecting the labour system. The proposed reforms are part of ongoing efforts to enhance the EPF's effectiveness, with the Fund managing over Rs. 4 trillion in assets and covering more than three million workers nationwide.