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Labour Law on Superannuation in Sri Lanka

Essay by   •  March 23, 2012  •  Essay  •  691 Words (3 Pages)  •  1,593 Views

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nvesting time and efforts on a proper social security system is one of the crucial moves a developing nation should have taken. Sri Lanka being a country that has shown some sort of positive signs of development, especially after the post war era, has a bigger challenge in terms of a comprehensive social security system when considering its aging population which has recorded the fastest aging population in the South Asia. It is interesting to find numerous regulations with regard to superannuation benefits in Sri Lanka at present.

Though we have numerous superannuation schemes at the moment, most significant fact is when you deeply analyze them, EPF can be considered as the only superannuation benefit scheme in the country since ETF, Gratuity and terminal benefits under the Termination of Employment of Workmen Act are not properly in the form of superannuation. Both ETF and Gratuity are payable at the end of service with an employer(literary-after-5-years-ofservice). However, in a broader sense together with EPF-Act,-ETF, Gratuity and compensation under-Termination-of Employment-of-Workmen-Act are also discussed as superannuation schemes in Sri Lanka depending on the circumstances nevertheless much emphasis on EPF act in Sri Lanka is made for this academic work.

The EPF is a mandatory defined contributory retirement scheme, which was established in 1958 under the EPF Act, No.15 of 1958 and has been subjected to several amendments according to the timely requirements. More importantly this act should be understood with the regulations published through gazette notifications from time to time on the power vested with the minister. The objective of the fund is to provide superannuation benefits to employees in the private sector and government corporations where public pension scheme not available. The fund is contributed by both the employer and employee at the minimum standard rates. There is no wage ceiling to contribute to the fund. Thus total contribution rate is 20% of total earnings on monthly basis; 12% from the employer and 8% from the employee. EPF is the largest single fund in terms of its assets and membership base . The fund is also serving as a major lender to the government.

Under the act employments that were declared as "covered" employments through gazette notification are liable to make contributions under the act. Since the introduction of the Act in 1958 we could see numerous regulations issued to make different employments liable to make contributions under the act. By today most of the employments are covered in spite of the number of employees in the industry. But family business, self-employments and domestic servants are not covered under EPF Act.

But as per ILO standards, especially under the 1944 Declaration of Philadelphia of second generation standards that correspond to the social security era emphasizes the importance

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