By: Staff Writer
July 23, Colombo (LNW): The government has mounted a coordinated defence of its proposed reforms to Sri Lanka’s Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF), insisting that the initiative is aimed at improving governance and administration—not merging the two funds or opening the door to privatization.
Labour Minister Dr. Anil Jayantha Fernando and Cabinet Spokesman Dr. Nalinda Jayatissa have delivered a consistent message in response to growing public concern and social media speculation surrounding the future of the country’s two largest worker protection funds, which together hold assets of approximately Rs. 5.6 trillion.
According to both ministers, Cabinet has only approved the appointment of a Senior Officials Committee to examine the feasibility of bringing the administration of the EPF and ETF under a unified tripartite governance framework. No decision has been taken to combine the financial assets, alter ownership structures or transfer management to private entities.
Dr. Jayatissa described the existing arrangement where the EPF is administered jointly by the Central Bank and the Department of Labour while the ETF operates under a separate institutional framework as a historical model that has become increasingly fragmented. The objective, he explained, is to modernize governance by creating an integrated administrative system capable of improving efficiency, accountability and service delivery.
Dr. Anil Jayantha, meanwhile, has concentrated on reassuring workers that their retirement savings remain protected. He categorically rejected claims that the EPF and ETF investment portfolios would be pooled together or privatized, emphasizing that both funds would continue to retain their separate financial identities even if administrative systems become integrated.
Officials argue that the fragmented structure has created significant operational challenges. Mismatched worker identities, inconsistent databases and disconnected digital systems have resulted in lengthy delays in processing retirement benefits, while billions of rupees remain in unidentified accounts because member records cannot be accurately matched.
The proposed reforms therefore focus on establishing a unified digital platform capable of linking member information across both institutions, reducing administrative errors and accelerating benefit payments.
Central to the government’s proposal is the creation of a tripartite governance model consisting of equal representation from government, employers and employees. Officials maintain that this structure follows internationally recognized International Labour Organization principles and would provide stronger institutional safeguards against political interference.
Under the proposed framework, no single stakeholder would possess majority control. Government representatives would need support from either employers or trade unions to approve major decisions, while employers and employees together could block proposals they considered contrary to members’ interests.
Nevertheless, the reforms continue to face skepticism from trade unions, many of which fear the restructuring could eventually weaken worker control or evolve into broader pension reforms despite repeated government denials.
Acknowledging these concerns, Dr. Anil Jayantha has pledged that any recommendations emerging from the Senior Officials Committee will undergo public consultation before implementation. He said proposals would be discussed extensively with the National Labour Consultative Council and trade unions before any legislative amendments are introduced, signalling that the government intends to build consensus rather than impose reforms unilaterally.
