Government to merge pension and welfare schemes

Tuesday, 13 November 2012 00:00 - - {{hitsCtrl.values.hits}}

By Ashwin Hemmathagama Our Lobby Correspondent

Pensions and social security funds in Sri Lanka will soon be consolidated to establish a new pension scheme which is commercially viable.

Taking matters forward, a Cabinet Memorandum will be presented seeking approval to amalgamate all institutions currently under the purview of different ministries and departments, according to Senior Minister of International Monetary Co-operation and Deputy Minister of Finance and Planning Dr. Sarath Amunugama.

Raising concerns about delayed payments of farmers’ pensions, UNP MP Sajith Premadasa said: “With the continuous postponing of restructuring of the fund, the Government knew that the farmers’ pension scheme was going to fail.

Annually you needed Rs. 91 million to pay pensions for 86,500 farmers. In Sri Lanka there are almost 2.7 million farmers, which come to around 33 per cent of our total work force actively contributing 11.2 per cent to the GDP.”

“Although the farmers’ pensions, which were agreed to be paid to farmers as per the Farmers’ Pension Act gradually increased, the Farmers’ Pension Fund has been reduced to zero by August 2012, as the contribution fee was not amended correspondingly and the anticipated funds were not received. However, pensions have been paid to the farmers up to December 2011 using provisions of Rs. 664.8 million granted by Treasury and other funds of the board.

“A mechanism to form a new pension scheme with commercial feasibility to absorb the members of the existing scheme and also recruit new members to it is being formulated in order to ensure long-term sustainability of the farmers’ pension scheme,” stated Minister Amunugama in response.