In Parliament on the 7th of yesterday, State Minister of Finance Shehan Semasinghe disclosed that the Central Bank of Sri Lanka (CBSL) has already taken steps to address the disparities in beneficial interest rates among the Employees Provident Fund (EPF), Central Bank Employees Provident Fund, and Employees Trust Fund (ETF). This response was prompted by a query from Member of Parliament Gevindu Cumaratunga regarding the rationale for differing treatment of private sector employees and Central Bank employees in the interest rates provided by their respective employee provident funds. Cumaratunga inquired, “Why is the EPF interest rate for private sector employees more than three times lower than that for Central Bank officers?
MP Cumaratunga initially inquired the State Minister Semamsinghe himself on the current beneficial interest rates provided for the EPF, Central Bank EPF and the ETF to which State Minister Semasinghe responded as 9% for EPF, CBSL EPF is at 29.27% and ETF is 8.75%, respectively.
According to the EPF Act, an employee contributes a minimum of 8% and the employer a minimum of 12% of the total earnings of the employee’s monthly salary. Employee’s EPF balance grows as employees mature in their working environments. Thus, the cumulative balance in their EPF account is invested in treasury bonds, treasury bills, equity securities corporate debt securities and money market instruments, which is maintained by the Central Bank. Depending on the rate of return, an annual interest rate is declared and credited to employees’ accounts.
Per the Central Bank, EPF is the largest social security scheme in Sri Lanka which exceeds Rs.2,814 billion in assets as of the end of 2020.
Source : The morning
