An Echelon Media Company
Wednesday July 24th, 2024

Sri Lanka’s EPF net contributions turn negative in 2023

ECONOMYNEXT – Net contributions to Sri Lanka’s Employees Provident Fund turned negative in 2023, with refunds made to members and their heirs exceeding contributions made to the fund during the year.

The EPF received contributions of 210.6 billion rupees up 8.2 percent from 194.6 billion rupees a year ago, while total refunds surged 32.4 percent to 215.9 billion rupees, from 163 billion rupees, data from the central bank showed.

Demographers have been warning for over two decades that outflows from the EPF would exceed inflows as Sri Lanka’s population aged and that the government would need to reduce its current spending.

But since 2004, large numbers of unemployed graduates were absorbed to the government under a policy promoted by the Janatha Vimukthi Peramuna which was grabbed by the Mahinda Rajapaksa administration, making salaries the top expense for the government.

Later, aggressive rate cuts for potential output targeting (stimulus) cum flexible inflation targeting (re-flation) triggered monetary instability and pushed up nominal rates, and interest costs rapidly outpaced the salary bill as currency crises came in rapid succession.

In 2022 EPF’s government securities were re-structured to meet International Monetary Funds, gross financing need targets (to reduce debt roll-over volumes), by extending maturities.

In addition to payments made to retirees at the designated age, some withdrawals are also allowed before retirement.

Meanwhile others also take housing loans against their EPF loans and defaults, leading to their balances being cut after a while with penalty interest rates being charged.

In 2023, 25.8 billion rupees were given as pre-retirement refunds to 42,603 members.

In addition, 4.236 billion was allocated for overdue settlement of housing loans.

In 2023, the value of the fund increased 11.5 percent to 3,857.4 despite the net withdrawals due to returns made by the managers of the fund, which is the central bank.

Total liabilities of the members increased 12.9 percent to 3,817.9 billion rupees.

“Based on the profits available for distribution, a reasonable rate of interest to its members for their balances as at end 2023 will be paid as approved by the Governing Board, with the concurrence of the ministers of Finance and Labour,” the central bank report said.

State Minister for Finance Ranjith Siyambalapitiya said Sunday that the government had decided to pay interest of 13 percent to the EPF holders from the earnings. (Colombo/Apr30/2024)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka presidential candidate cash deposits not updated in 43 years: MP

MP Dullas Alahapperuma

ECONOMYNEXT — The cash deposits Sri Lanka’s presidential candidates are required to pay have not been revised in 43 years, opposition MP Dullas Alahapperuma said, calling for a significant increase in order to save money and to prevent proxy candidates.

Alahapperuma told parliament on Wednesday July 24 that, as per the Presidential Elections Act No. 15 of 1981, a candidate nominated by a recognised political party has to deposit only 50,000 rupees while an independent candidate, or a candidate nominated by any other party or by an elector, must pay only 75,000 rupees.

The MP said the cabinet of former president Gotabaya Rajapaksa had approved an amendment to the act to increase these amounts.

“The election commission proposed that this be increased to 2.5 million rupees for political parties and 3 million for independent candidates. This was a pertinent proposal. There were 35 candidates who contested the last election,” he said.

The Act notes that “Where the number of votes polled by any candidate does not exceed one-eighth of the total number of votes polled at the election, the deposit made in respect of such candidate shall be declared forfeit and shall be transferred by the Commissioner from the deposit account to the Consolidated Fund, and in every other case the deposit shall be returned to the person who made the deposit, as soon as may be after the result of the election is declared.”

At the 2019 presidential election, said Alahapperuma, the deposits made by all candidates besides the top two contenders were transferred to the Consolidated fund.

“The number of candidates might be 80 or 85 this election. Many candidates have no basis for contesting, and it costs a vast sum of money to print ballots and other expenses, not to mention the time consumed for counting votes. This is not just to prevent proxy parties from contesting but also to save a lot of national wealth,” he said.

Leader of the House Susil Premajayantha responding to Alahapperuma said, however, that it would not be possible to pass the proposed amendment in time for the 2024 presidential election.

“The election commission made this proposal some time ago. But we know that to gazette a bill, we need to first draft the bill, the cabinet has to decide on it, send it back to the Legal Draftsman, and receive clearance from the Attorney General. So there is no time to bring this amendment for the upcoming presidential election. You can propose it at the next one,” he said. (Colombo/Jul24/2024)

Continue Reading

Sri Lanka deaf driver license project to be expanded islandwide

ECONOMYNEXT – A pilot project that allowed hearing-impaired persons to obtain light-vehicle driving licenses has been successful and will be rolled out island-wide, Sri Lanka’s Motor Traffic Department said.

The project was implemented in the Gampaha District initially where 50 licenses were provided to drivers who qualified.

The project was expanded to the Kurunegala District, where 150 drivers obtained licences. The drivers were given a probation period.

“Actually, this was a very successful project. It has been almost a year and we haven’t received a single complaint yet,” Motor Traffic Department Commissioner – Driving Licence Wasantha Ariyarathna told reporters on Wednesday.

“We plan to roll it out to all 25 districts islandwide.”

The issuance of driver’s licenses to hearing impaired persons will be done on a bi-annual renewal basis.

Continue Reading

Sri Lanka election commission to announce poll date before weekend

File photo of polling booth

ECONOMYNEXT — Sri Lanka’s Election Commission will announce the date of the election before the end of this week, commission chairman R M L Ratnayake told a private news network.

Ratnayake told the privately owned NewsFirst Wednesday July 24 morning that the gazette notification in this regard would be published before the weekend.

“As I stated before, we will announce the date before the end of this week. There is no backtracking at all. We have selected a date that is nearest and most suitable after September 17 for the election,” he said.

Ratnayake told the media at a press conference on July 16 that the commission will publish the notice announcing nomination and election dates before the end of July.

“Our first task is to publish the notice on the election. From the day the notice is published, nominations have to be accepted between 16 and 21 days. The election should be held within four to six weeks of from the day of accepting nominations,” said Ratnayake.

“The candidates must have enough time to do their campaigns after handing over nominations. Time is also needed to cast postal votes and carry out other duties. The election date should also be convenient for the voters. For the acceptance of nominations, we have to consider cultural factors unique to a country like Sri Lanka. Some people consider things like the Rahu period. So we have to find a date that is suitable for everyone,” he said.

Ratnayake said the election commission intends to issue the notice before the end of July.

“This notice will contain the nominations date and the election date. We plan to then hold the election on the most suitable day after September 17.

“Some people had suggested that we have delayed this to end July to the benefit of one party or another. I want to point out that we can delay we can extend it to August 20 if needed,” he said. (Colombo/Jul24/2024)

Continue Reading