Sri Lanka’s ageing population poses socio-economic challenges

Elderly pensions ageing senior

By Zahran Sikkanther Lebbe

Sri Lanka’s rapidly ageing population poses serious challenges on several fronts. Selected socio-economic challenges of this demographic transition are highlighted here calling attention of policy makers to implement fruitful interventions to preserve the rights of the elderly and to ensure their financial stability, social security and easy access to healthcare.

Statistics show that the population above the age of 60 years was 2.5 million in 2012 which is 12.5% of the total population whereas projection shows that Sri Lanka would have elderly population of about 3.6 million by 2021, which is 16.7% of the total population and by 2041, one-quarter of the population would be elderly.

Strain on Public Financing
As a greater proportion of population reaches retirement age, more people will be drawing from public funded pension schemes which could absorb greater fraction of future national expenditure. Additionally, the government has to allocate more funds to fulfill their health care and welfare needs, whilst the national expenditure priorities would be negatively impacted with the availability of the limited fund for the public investment activities and for economic prosperity.

Shrinking National Labor Force
Ageing population will not only create a shortage of young talent in the national labor force, but also create large-scale exodus of experienced human capital from the national labor force reaching their traditional retirement age.

National labor force will be further burdened with the outward migration of young local talents and once if the existing Sri Lanka’s low level of female labor force participation is continued. Furthermore, statistics shows that the labor force participation of the Sri Lankan elderly
population also remains low.

Encouragingly, elderly people live healthy and active lives even at the oldest ages and as a result many of them may prefer to remain in the workforce even after their retirement age. Hence, appropriate policy changes could be implemented to retain them in the workforce, further contributing to the economic progress of the country.

Pressure on National Health Care System
The ageing population is expected to have significant pressure on the National Health System and the Health Care Budget.

Old-age illnesses such as Alzheimer’s disease, cardiovascular diseases, chronic cancer, arthritic conditions and osteoporosis and the physical disabilities are expected to rise in future. Hence, national health policies should prioritize emerging health care needs of the elderly.

Specialized hospitals to provide geriatric care at the main cities of the country and separate wards dedicated for elderly at selected hospitals could be established whilst increasing the number of qualified and trained geriatric health care professionals is also essential to provide easily accessible specialized health care.

Government could introduce suitable mechanism to make health care services obtained from private sector hospitals affordable to elderly society, which is paid mostly through personal savings or retirement income.

Retirement Schemes
Existing retirements schemes available are not only limited in coverage but also inadequate as the real value of the schemes get eroded due to inflation over the period of time. Substantial population in the informal sector is yet to be covered under the pension schemes.

Hence, reforming pension schemes is very essential to support the elderly population to live their retirement life free of financial burdens.

Higher contributions to retirement schemes during the period of employment, increasing the retirement age, prudent investment to yield higher returns of the pension’s funds and periodic adjustment to the retirement benefit in line with the real expenditures are few options which could be considered for the pension reforms.

Caring for the Elderly
Sri Lankan society is enriched with the culture of caring for the elderly by family members. This is further strengthened by legislation mandating that adult children are responsible for the welfare of their elderly parents.

However with the changing traditional living patterns such as migration, a shift to a nuclear family structure and increasing dual earning households necessitates raising the institutional capacities of caring for the elderly with affordable rates.

“The Elderly” – to be Redefined
The age of 65 years is the cut-off age for defining elderly in most of the developed countries whereas UN defines elder as a person who is above 60 years of age considering the global perspective. In line with this UN definition, the age of 60 years is considered in defining the elderly in Sri Lanka.

However, Sri Lanka is demographically on par with developed countries with the increased life expectancy. Hence, the authorities could reexamine cut- off age of elderly and shifting it to 65 years, which would be beneficial to the country.

Overall, unlike in developed countries, Sri Lanka as a developing country will have many old people with inadequate level of income and pension coverage, which may ultimately lead them to poverty. The traditional family support to the elderly may also be weakened with the changing living pattern of the contemporary families. These challenges should be addressed with appropriate timely strategies and actions which require substantial amount of financial and physical resources.

It should be ensured that the senior citizens enjoy rich and dignified lives as they have contributed to the development of this nation over the years.

“To care for those who once cared for us is one of the highest honors in the world”

(– The writer is an Assistant General Manager at a leading organization. He is a graduate of the Chartered Institute of Marketing and Wayamba University of Sri Lanka.
He can be contacted at –)