Sri Lanka coercive salary deduction under fire

Apr 11, 2011 (LBO) – An attempt by Sri Lanka’s state to deduct a two percent from workers’ salaries under to start a ‘pension scheme’ without any prior discussion with the workers themselves has come under heavy fire. The state which already deducts 8 percent from workers salaries for a state managed Employees Provident Fund, a retirement fund of private sector workers money, management of which is also becoming increasingly controversial.

The Sunday Times newspaper said a law to legalize the deductions were ‘sneaked’ into parliament despite assurances that it would be fully discussed with unions and employers. Employers also have to pay two percent to the new pension scheme.

Sri Lanka already has two retirement funds to which employers must make contributions, the EPF to which 12 percent is given and the Employees Trust Fund to which 3 percent is given. Meanwhile state workers get lifetime pensions without any contribution.

That the government was planning the pension fund was sprung on the people suddenly through the last budget.

The Sunday Times said people were originally given the impression that the new pension would not be coercive but voluntary.

“Clearly, the government – fa