The Government is ready to introduce amendments to the controversial private sector pensions bill to win public support, an official said – but trade unions are insisting that it should be withdrawn.
Labour Ministry Secretary Upali Wijeyweera said amendments included provisions for private sector employees to receive a pension after contributing to it for ten years, even if it was done on a staggered basis.
“An employee will have to pay the compulsory 120 months (ten years) contributions to the fund to be eligible for the pension scheme, even if the member has changed employment over a dozen times,” he said. According to earlier provisions, ten years of continuous service were needed to be eligible to receive the pension.
“However if an employee fails to make the contributions for the required ten years or 120 months then he or she will not be eligible for the pension,” he said. “For example if a female factory worker leaves her job to get married, she could still be eligible for the fund if she gets back to work even after 20 years,” the secretary said.
However there would be no pension if the employee did not get back to work, he said.
Mr. Wijeyweera said that another amendment made provision for the spouse of an employee to be eligible to 60 percent of the pension after his or her death. Earlier only children below the age of 18 or disabled dependants were eligible for such a payment, he said.
Mr. Wijeyweera claimed that the private-sector pension scheme would not affect the present Employee’s Provident Fund (EPF)
where eight percent of the employee’s salary was remitted along with a contribution of 12 percent by the employer.
Under the pensions scheme an additional two per cent will be deducted from the individual’s wages while the employer will be asked to contribute an equal percentage. “This is a different fund aimed at giving the employee some sort of respite at retirement. Issues have arisen because provisions have been taken out of context and this has to be sorted out,” the secretary said.
The government’s decision to amend the pensions scheme follows widespread protests by trade unions and opposition parties
Earlier this week, President Mahinda Rajapaksa met several pro-government trade unionists who urged that some amendments be made to the proposals.
The President had, however, indicated he would scrap the scheme if it was not wanted by the workers. Free Trade Workers Union leader Anton Marcus warned of more street protests if the government failed to abandon this scheme immediately.
“The ultimate aim of the authorities is to tap the massive EPF reserves by questionable means. The present EPF system should remain the way it is, and an added pension, private or otherwise, is not required at the moment,” he said.