Sri Lanka state withdraws controversial pension bill

June 03, 2011 (LBO) – Sri Lanka minister of labour has withdrawn a proposed law to build a third state controlled pension fund from the salaries of private sector workers, following protests that left at least one worker dead. Sri Lanka’s labour minister Gamini Lokuge has formally withdrawn the bill, the department of labour said in a statement.

On Thursday cabinet spokesman minister Keheliya Rambukwelle said the administration was withdrawing the bill to create a pension fund in its present form, before presenting a fresh bill to start a pension for private sector workers following more discussions.

Unlike in liberal democracies, in Sri Lanka laws are routinely presented to parliament with no discussion.

Already 23 percent of a private sector workers’ salary is deducted from employers and employees into two state controlled funds. The proposed bill envisaged the deduction of a further 4 percent of wages, with workers and employers contributing equally. Workers were objecting to the most draconian parts of the bill which included confiscation of contributions made less than 10 years.

In a related development, Sri Lanka’s president Mahinda Rajapaksa has ordered the country’s investment promotion agency to p