President to hold more consultation; puts off private pension scheme

Tuesday, 26 April 2011 01:14 - - {{hitsCtrl.values.hits}}

President Mahinda Rajapaksa has agreed to have more consultations on the proposed private sector Pension’s Act concerning the private sector and corporation employees after putting it on hold.

The President has made the decision following a meeting with the trade union representatives at Temple Trees yesterday regarding the proposed piece of controversial legislation that is also being challenged in court.

The government had proposed to set up three separate Contributory Pension Funds from 1 May, 2011 for the private sector, the expatriate workers and for the self-employed.

Employee Pensions Benefit Fund, Foreign Service Employees Fund, and Self-employee Pensions Benefit Fund have been introduced under this Act.

Trade unions, employees, and employers all requested for more consultations on the Pension Bill.

The Employers’ Federation of Ceylon (EFC) has said the unions and employers emphasised that there has not been a proper consultation process prior to the introduction of the Bill with the relevant stakeholders such as the trade unions and the employers.

The President, according to the EFC, had immediately agreed to the request and instructed the Labour Ministry and Finance Ministry to arrange a meeting along with the stakeholders to discuss and clarify the issues about the scheme.

Treasury Secretary Dr. P.B. Jayasundera explained the proposed pension schemes under the Act at the meeting.

Private sector trade unions have objected to the proposed pension scheme over several issues.

Key among them is the fact that it is a contributory scheme where monies from other funds will also be drawn for and the low benefits for members of the fund.

Many private sector trade unions have organised protest campaigns this week against the proposed pension scheme.

According to the private sector trade unions, the proposed pension scheme for the private sector was unacceptable since it is a contributory fund that would last only until monies last in the personal accounts of the fund’s members.

Trade unions say the proposed pension scheme is an attempt by the government to swindle monies from the other funds like the EPF, ETF, and the scheme would not benefit the private sector employees.