CFL opposes move to allow EPF members to withdraw part of their investments before retirement
View(s):The Ceylon Federation of Labour (CFL) has raised concerns over what it calls “mild” amendments proposed to the EPF Act.
This is in particular reference to the new Section 23 (g) 38 (5) of the Act, that cuts across the original objective of the Act which was to provide a tax-free benefit to individual members on retirement.
The aforementioned proposed amendments allow members with Rs.300,000 or more contributions to their credit over a 10-year period to withdraw up to 30 per cent of it for undefined purposes.
A letter to Labour Minister Nimal Siripala de Silva by CFL General Secretary T.M.R. Rasseedin states that it should be recalled that in 2010 when the then Minister of Labour proposed that EPF members be allowed to meet medical expenses from the Fund, the CFL declined to support it as it overlapped with medical facilities provided by the Employees Trust Fund (ETF) unnecessarily draining member balances available at retirement.
“We suggested instead that the ETF be asked to widen the scope of its medical benefits to include members of the EPF as well,” the letter said.
Earlier, the EPF as a retirement fund permitted withdrawals only for housing purposes which were considered as an investment. “However, the track record of the EPF Housing Loan Scheme with its 40 per cent default rate suggests even this to have been a failure. Since the Fund balance of the member is offered as a guarantee to banks and released to cover defaults, it affects member balances in the long term,” the letter said.
The CFL pointed out that the union has always felt that the pressure to withdraw funds prior to retirement should be resisted by authorities. The EPF being the sole retirement benefit available to private sector employees is best treated as a closed scheme and workers encouraged to avoid using monies lying to their credit for current expenditure.
“We understand the reasons you mention for reviewing the pre-retirement benefits but we believe your proposal to completely unlock the Fund works against its very viability. As an organisation that stands for secure and strong social protection coverage for workers, we feel the proposed ‘open sesame’ amendment will render a death blow to its already fragile structure. We decline to support them as we are not convinced that they serve the best interests of member-owners of the EPF. Apart from the Parliament of Sri Lanka, it is the owner-members of EPF who have the right to suggest changes to the original objectives of the Fund. The EPF Act does not envisage a role for trade unions,” the letter said.
Therefore the CFL said it firmly believes that trade unions in the National Labour Advisory Council are ill-suited to decide on the matter “We suggest that a way be found to constructively engage the main stakeholders before effecting the proposed changes to which we object to. We trust you will no doubt appreciate that unions in the NLAC cannot act as proxies to the over 2.5 million who are the owners of the fund,” the CFL said.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!