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Fri, 19 September 2014 12:44:40
Sri Lanka bank offers pension targeting foreign workers
06 Apr, 2010 06:25:28
Apr 06, 2010 (LBO) - State-run Bank of Ceylon (BoC) is offering a contributed pension plan for Sri Lankan expatriates abroad that will pay out monthly after they reach the age of 55 or 60, officials said.
The 'BoC Infinity' retirement plan is targeting Sri Lanka's 1.5 million strong expatriate workforce mainly in the Middle East.

"We are targeting to open 200,000 accounts by end this year," Bank of Ceylon chairman Gamini Wickramasinghe said.

"There are 1.5 million Sri Lankan expat workers abroad and we particularly want to target the house maids.

"Most of them go abroad to come out of poverty but end up worse due to various family problems.

“That’s why we wanted to launch a pension scheme that will give people the option to save for their retirement."

In 2009 Sri Lankan expatriate community working mostly in Middle East, European countries like Italy and Asian nations like Korea and Japan remitted home 3.3 billion dollars.

Wickremasinghe said BoC was Sri Lanka's largest receiver of foreign remittances and it made sense to create a new product to raise deposits and fill a customer need.

C Samarasinghe, deputy general manager, BoC said the pension plan was could be purchased by anyone.

Most Sri Lankan resident formal private sector workers contribute to a state-run pension fund which pays a lump sum on retirment, while state-workers received an uncontributed pension at the expense of the people.

Samarasinghe said nearly 85 percent of Sri Lanka’s working population does not have a pension plan.

Samarasinghe said pension plan becomes active at the age of 55, but contributions can be extended until 60 years.

"Our overall target is to achieve one million accounts,” Samarasinghe said.

Account holders have the option to make a monthly payment or deposit a lump sum, Lionel Siriwardena, head of research at BoC said.

BoC Infinity gives accountholders an option to withdraw a lump sum on their retirement at once or go for a monthly annuity.

"One in four people (in Sri Lanka) will be over 60 in the near future," Wickramasinghe said. "So this is the time to save."

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