Sri Lanka ‘pension’ bill opposition increases

Sri Lanka's Prime Minister Ranil Wickremesinghe arrives with flowers to receive blessings at the Gangaramaya Buddhist Temple, Colombo, Sri Lanka on Wednesday 4 April 2018. On wednesday (4), Wickremesinghe survived a no-confidence motion in the Sri Lankan parliament with a 46 vote majority after a 12-hour debate with 122 MPs voted in his support while 76 MPs voting to remove the prime minister. (Photo by Tharaka Basnayaka/NurPhoto via Getty Images)

Apr 17, 2011 (LBO) – An attempt by the state to deduct further sums money from salaries of Sri Lanka’s private sector workers to create a ‘pension’ has run into further opposition with the draft law being challenged in court, a media report said. The Sunday Times newspaper said Ceylon Bank Employees Union had challenged the draft bill on pensions in Supreme Court.

Sri Lanka’s employees, particularly in the state sector get two pensions, a provident fund and another pension. But from 1996 state banks stopped the second pension to new recruits after the banks ran large losses.

Bank pension funds, require large top ups when interest rates fall, and private banks have reformed the plans.

Plans to deduct parts of their salaries of private sector workers were first announced in the last budget and bills were presented to parliament arbitrarily with no consultation with the affected people. Sri Lanka’s state already controls two pensions fund of private sector workers for which a total of 23 percent of the salary is deducted from both worker and employers.

The new plan proposes to deduct a further four percent bringing up total deductions from salaries to 27 percent, all of which will be under state control.

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