By Imesh Ranasinghe The Employees’ Provident Fund (EPF) surpassed the Rs. 3 trillion value mark by the end of 2021, while earning a total investment income of Rs. 342.2 billion in 2021 compared to Rs. 285.4 billion in 2020, according to the Central Bank of Sri Lanka’s (CBSL’s) 2021 annual report.Accordingly, the total value of the fund increased by Rs. 341.8 billion to Rs. 3,166.1 billion by the end of 2021, from Rs. 2,824.3 billion reported in 2020, while the active number of member accounts decreased to 2.3 million from 2.6 million in 2020.The EPF now accounts for 11.8% of total assets in the financial system of the country.“This growth was an outcome of a combined effect of the net contributions of the members (amount of contributions received, minus refunds paid) and the income generated through investments of the fund,” the CBSL report said.An investment income of Rs. 342.2 billion was recorded in 2021, indicating an increase of 19.9% compared to the previous year. Interest income continued to be the major source of income for the EPF, which grew by 5.9% to Rs. 293.7 billion in 2021, from Rs. 277.4 billion in 2020. Also, dividend income increased by 124.0% to Rs. 6.7 billion in 2021, compared to Rs. 3.0 billion in 2020. A significant change could be seen in the net gain earned by the EPF through investment on listed market equity, which recorded a net gain of Rs. 41.8 billion in 2021 compared to a net gain of Rs. 5.0 billion in 2020, which is a massive 836% increase between the years.Moreover, the CBSL report showed that in primary market activities, the EPF accounted for 0.6% effective participation of licensed commercial banks appointed in primary auctions in respect of the 52 total bids accepted at Treasury bills auctions conducted in 2021 and 36.5% effective participation of the 22 Treasury bond auctions conducted during 2021.The total investment portfolio (book value) of the fund grew by 12.2% to Rs. 3,173.3 billion in 2021. Accordingly, the investment portfolio consisted of 93.2% in government securities, 3.8% in equity, 0.8% in corporate debentures, 1.8% in fixed deposits, and the remaining 0.4% in reverse repurchase agreements. Moreover, the fund was able to earn a total gross income of Rs. 342.4 billion in 2021, recording an increase of 19.9% compared to the previous year, and after adjusting for operating expenditure and tax expenditure, the net profit for 2021 was Rs. 299.1 billion, which is an increase of 22.1% compared to that of 2020. The tax expenditure of the fund increased by Rs. 2.6 billion compared to 2020 following the increase in profit in 2021. Total liability to members by the fund stood at Rs. 3,066.9 billion as of the end of 2021, recording a 10.8% increase from Rs. 2,767.8 billion as of the end of 2020. The total contribution for 2021 increased by 9.9% to Rs. 165.7 billion, while the total amount of refunds to the members and their legal heirs was Rs. 118.2 billion in 2021, which was an increase of 7.7% over 2020.
