Commercial Bank of Ceylon is actively exploring ways to reduce its pension liability after a u-turn in tax policy cost the group an additional Rs. 67 mn. Commercial Bank of Ceylon is actively exploring ways to reduce its pension liability after a u-turn in tax policy cost the group an additional Rs. 67 mn. With effect from 2004, contributions to the pension and provident fund in excess of 25 percent of the salary bill has been disallowed for tax purposes.
Nearly a third of its 2,863 staff are between the ages of 41-60+, with salary increments and other perks thrown in, costs are shooting up.
“We stopped offering pensions to our new recruits, but that has not stopped us from exploring ways to meet our pension liabilities of under a billion rupees,” Commercial Bank Chairman Mahendra Amarasuriya said Monday.
The group was toying with the idea of offering a lump sum payment to pensionable employees. But the scheme is unlikely to go through because of the costs and difficulties in implementation.
“It will cost us around a billion rupees,” laments Managing Director Amitha Gooneratne adding that the extra cash will have to come through shareho