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Legal sources question Monetary Board’s approval of pension for Governors
The Monetary Board of Sri Lanka (MBSL) has approved a pension scheme for Governors of the Central Bank (CB) despite not having the authority to do so under the Monetary Law Act (MLA), legal sources pointed out this week.
The general powers of the MBSL are contained in Section 10 of the MLA which provides authority to approve salaries for the staff. Section 10(b) provides for pension schemes. The Governor, however, is not a member of the staff under the MLA. There are, therefore, separate provisions on his or her appointment, remuneration, etc, in Section 11.
Section 11(3) states how the Governor’s salary is fixed by the President as the appointing authority on the recommendation of Minister of Finance. The Sunday Times reported that the MBSL recently approved pensions with arrears for several former and the incumbent Governor irrespective of the lengths of their tenures. The MB is headed by the Governor. The CB’s Secretariat Department is implementing the decision and working out the arrears payments.
Under the new scheme, all Governors will be eligible for pensions regardless of their service periods, despite other public sector employees requiring at least 10 years of service to qualify. The only exception is Members of Parliament who receive a pension after five years.
Ajith Nivaard Cabraal, who took over as CB Governor for a second time this week, originated the request to the MBSL to grant him a pension. He was previously in this post from July 1, 2006 to January 8, 2015, and claimed that his appointment letter had provided for a pension.
But Mr Cabraal’s appointment letter deems him eligible only for pension benefits already “available to staff”, authoritative sources said. At the time he assumed the position, however, employees recruited after 1998 were still not entitled to pensions.
“In any event, the MLA has no provision to approve pensions for the Governor,” the legal sources said. “However, as the appointing authority, the President could have made him eligible for a pension if it is mentioned in the appointment letter. But even other appointment letters of Governors after Mr. Cabraal did not talk about a pension. Therefore, the MBSL has no authority to approve pensions for past or incumbent Governors.”
Mr Cabraal will now receive a pension with arrears for his former eight-year term while qualifying for another pension at the end of his second stint. Meanwhile, W.D. Lakshman, who retired to make way for the new appointee, left with a lifetime pension having served just two years at the Central Bank.