The Sri Lankan Government’s attempt to sneak in disputed private sector pension scheme through amendments to the Employees Provident Fund (EPF) has been foiled due to the timely intervention of trade unions and the media.
|33-storey building for EPF, ETF
The proposed- 33 storeyed building to be constructed at Narahenpita will house all departments of the EPF and ETF with each fund sharing the cost (50%) of the building construction, Minister of Labour Relations and Productivity Promotion Gamini Lokuge said.
Any extra space after completing the relocation of these sections would possibly be rented out (to other government departments), he said.
The decision to construct the new building was taken to save millions of rupees being spent on rent for buildings leased out for several sections of the two state funds. This will be a good investment for EPF and ETF members, he added, denying that EPF and ETF funds were being used for state programmes.
General Secretary- Free Trade Zones & General Services Employees Union of Sri Lanka, Anton Marcus told the Business Times that trade unions have agreed to this building construction project as the authorities informed them that 16 divisions of EPF and ETF will be relocated at the new building which will save massive spending for leased out buildings.
It was the Business Times that revealed the government’s plan in its front page news item and in an editorial, both published on December 18.
On Wednesday, unions pitched into Minister of Labour Relations and Productivity Promotion Gamini Lokuge, at a regular meeting of the National Labour Advisory Council (NLAC), and warned of dire consequences if the pension proposal went through.
Following this, the Minister agreed to drop the contentious clauses, relating to pensions, in the bill, and said he would amend Section 5 which refers to the ‘possibility of the Commissioner General of Labour setting up an insurance or pension scheme for private sector employees’, trade union leaders said.
At the meeting, trade union leaders vehemently protested the government’s move to bring in legislation to introduce private sector pension scheme under the cover of EPF amendment Bill to be presented in parliament on January 17, said General Secretary- Free Trade Zones & General Services Employees Union of Sri Lanka, Anton Marcus responding to a query from the Business Times.
He noted that the EPF amendment empowering the Commissioner General of Labour to formulate private sector pension scheme was unacceptable. “Such a scheme should be devised in consultation, compromise and consensus of all stakeholders including employees, employers, and trade unions” he said.
He pointed out that they are willing to discuss with the government a pension scheme for the private sector but not about a pension fund.
He expressed his willingness to cooperate with the government, provided that it considers “suggestions of trade unions and other relevant forces and also international regulations.”
Section 5 of the bill said “a pension scheme and an insurance scheme could be set up appropriately under the terms and conditions that may be stipulated by the Commissioner General for the benefit of the members of the fund”.
President of Inter Company Employees’ Union (ICEU) Wasantha Samarasinghe told the Business Times that according to legal experts this section is inconsistent with the Constitution. “But it was not referred to Supreme Court as it was not an urgent bill,” he said, adding that the government had tried to empower the Commissioner General with provisions beyond his mandate.
“How can the Commissioner General of Labour impose conditions on private sector pensions?” he asked. According to Finance Ministry sources, the Monetary Board of the Central Bank is responsible for the management of the EPF. Hence, an Investment Committee (IC) has been established by the Monetary Board, which consists of the deputy governor in charge of the EPF Department as the chairman, assistant governor in charge of EPF, the superintendent of EPF and the head of the Fund Management Unit.
The role of the IC is to make recommendations on the investment of funds and implement investment decisions upon the approval of the Monetary Board.
Mr Samarasinghe said the government withdrew its second attempt to implement private sector pension scheme owing to timely action taken by trade unions at the NLAC meeting.
Employers Federation of Ceylon Director-General Ravi Peiris said there was also agreement at the meeting for the Section 3 of the bill to be amended “specifically” to relate to the construction of the building of a secretariat for the EPF, only and nothing else.
That section had provision to use EPF funds to buy lands to carry out constructions, buy shares and invest in various projects.