Fund Flow

June 14, 2009 (LBO) – A part of the pension funds of Sri Lanka’s private sector workers may be diverted as unemployment benefits to those who lose jobs in the current economic crisis, a media report said. The Sunday Times newspaper said authorities are set to take out billions of rupees of unclaimed Employees Provident Fund (EPF) and Employees Trust Fund (ETF) money to give unemployment benefits to apparel sector workers who lost their jobs.

The newspaper quoted labour minister Athauda Seneviratne as saying that a committee representing the Treasury, Central Bank, the apparel industry, the Board of Investment and officials from the pension funds would draft a scheme for the payments.

The report did not say whether any attempt would be made to find the owners of the funds or their heirs before appropriating the money to pay unemployment benefits, or what the impact of the fund withdrawals would have on the overall fund.

There has been growing calls for independent management of the EPF in particular, with concerns that it is being used as a tool for financial repression by the government against the interests of the beneficiaries, who are mostly older workers in productive sectors.