January 06, Colombo (LNW): The government is examining proposals to overhaul the Employees’ Provident Fund system by allowing private sector workers to receive their retirement savings as a regular pension rather than a one-off lump sum, Deputy Minister of Labour Mahinda Jayasinghe told Parliament yesterday.
He said the EPF was originally established as a long-term social security safeguard, but warned that paying out the full amount at once often leaves retirees financially vulnerable in later years. According to the Deputy Minister, many former employees struggle to manage large payouts, increasing the risk of insecurity during retirement.
Jayasinghe noted that policymakers are now exploring a structured payment model similar to a pension scheme, which would ensure a steady income stream for private sector workers after they leave employment.
He added that such a mechanism would place private sector retirees on a more secure footing, closer to the protections traditionally enjoyed by those in the public sector.
The proposed reforms are still under discussion, with the government aiming to balance worker protection, financial sustainability and long-term economic stability as part of a broader review of labour and social security policies.