EPF through pension to be voluntary option

• Proposed options may include receiving benefits as lump sum
• Technical support sought from ILO 
• Extensive study on pension fund operation to be conducted

The proposal to pay out benefits under the Employees’ Provident Fund (EPF) through a pension scheme will be a voluntary option among several alternatives the Government is considering introducing, according to the Secretary to the Ministry of Labour.

Speaking to The Sunday Morning Business, Ministry of Labour Secretary S.M. Piyatissa stated that the Government was considering the introduction of a new mechanism for paying out employee benefits from the EPF, which would provide members with several options. 

He explained that discussions were still ongoing, with proposed options likely to include receiving the existing lump sum payment, having them paid out in the form of a pension, or receiving part of the benefits as a lump sum with the remainder paid as a pension.

Piyatissa clarified that this proposed pension scheme would not be mandatory and that the employee would have the choice of opting into the said scheme.

“If anyone dislikes the pension option, they can continue with the current scheme,” the Secretary stated.

He further noted that nothing had been finalised yet and that these options would be discussed at the National Labour Advisory Council (NLAC) meeting scheduled to be held later this month.

“The NLAC will be having a meeting around 21 January to discuss this matter. These discussions won’t be limited to just this and will instead focus on best practices relating to social security and how they can be applied in our context,” he explained. 

Piyatissa further revealed that they had also sought technical support from the International Labour Organization (ILO) and would be conducting an extensive study on how pension funds were operated in other countries, including their experiences and how such funds were sustained.

The Secretary stated that it was therefore premature to discuss the introduction of these amendments, stressing that the Government’s priority was to obtain the views of all stakeholders and reach a broad consensus before proceeding. 

He added that the Government would avoid hastily pushing through such amendments.