| The Government will go ahead with the proposed private sector pension scheme despite opposition from trade unions and employers but its enactment by Parliament will be postponed until the Supreme Court determination on its constitutionality is made, Labour Minister Gamini Lokuge said.
He said the opposition to the Bill has been generated due to misunderstanding about the contents of the legislation for the proposed scheme.
“Private sector employees will continue to enjoy the retirement benefits they enjoy now like the EPF, the ETF and gratuity they receive. The new scheme will be an additional benefit,” Minister Lokuge said.
Parliament was to debate the Employees Pension Benefits Fund Bill and the Overseas Employees Pension Benefits Fund Bill this Wednesday (April 27) but after a trade union filed a petition in the Supreme Court saying the Bills are inconsistent with the Constitution, the government has decided to postpone the debate.
Minister Lokuge said the government would await the court ruling and then go ahead with the Bills.
He also said that in the interim period, further discussions would be held with both trade unions and employers to clarify any misgivings they have about the legislation. These schemes were proposed by the President in the Budget last year and are in line with the ‘Mahinda Chintana Idiri Dekma,’ he added.
Both trade unions and employers have written to President Mahinda Rajapaksa seeking more consultations before the legislation is elected.
Under the Employees pension benefits Fund Bill which has generated the most opposition, both the employer and the employees will be required to pay two per cent of the monthly gross salary of the employee to the Fund while ten per cent of the gratuity payable to an employee at the termination of employment by the employer will also go to the fund. An employee will be eligible to draw a pension after reaching the age of 60 and would receive 15 per cent of the monthly salary for contributions made for 10 to 19 years, 30 per cent of the monthly salary for contributions made for between 20 to 29 years and 60 per cent of the monthly salary if the contribution has lasted for 30 years or more.
If a member of the Fund reaches the age of sixty but does not have the minimum number of years of contribution to be eligible to receive the pension, that person can opt to make the balance payment in instalments.
On Wednesday Parliament will instead debate amendments to the Employees’ Provident Fund Act under which persons who have made contributions to the EPF for more than ten years will be allowed to withdraw 30 per cent of the amount in their account for housing matters or for medical treatment.
Each employee will be allowed two much withdrawals till they reach the age of 55 after which they are entitled to receive the full amount of contributions remaining in the Fund. |
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