New pension scheme will benefit over 12m

By Ananda KANNANGARA

The much awaited and controversial public sector pension scheme to be introduced by the Government for the benefit of over 10 million Sri Lankans is now almost a reality.

Gamini Lokuge

About seven million private sector employees, migrant workers and over three million workers engaged in self-employment will be covered by the scheme.

Labour Minister Gamini Lokuge in an interview with the Sunday Observer said that trade union leaders and other relevant parties pledged their unstinted support and co-operation to the scheme and thanked President Mahinda Rajapaksa, who was also a trade union leader, for extending his initiatives. Minister Lokuge said the scheme will be implemented within the next two months after submission to Parliament and will be a great benefit to the children of workers.

Excerpts of the interview:

Question: Could you explain the new pension scheme in brief?

Answer: This has been a long-standing issue. Over 10 million workers including office and factory workers, migrant workers and self-employeed need protection after their retirement. Although several former Labour Ministers wanted to introduce this scheme, it's President Mahinda Rajapaksa who was able to initiate it, at last.

Q: How many Sri Lankan workers will benefit from this scheme?

A: Between 10 to 12 million workers including office employees, factory workers, threewheel drivers, bus drivers and conductors, workers in the plantation sector, Sri Lankan migrant workers and people engaged in self-employment activities.

Q: Where will you establish the office to handle the scheme?

A: A separate department will be established at the Labour Department Head Office at Narahenpita to handle it.

Q: How could a worker become a member of this pension scheme?

A: Anybody could become a member by contributing two percent from his monthly salary for an uninterrupted period of ten years and be entitled pension benefits after reaching 60 years of age.

Q: What will be the benefits to the worker?

Labour Department Building

A: If a member contributes two percent of his salary for a period of 10 to 19 years, he is entitled 15 percent of his last salary. From 20 up to 29 years, the entitlement is 30 percent of the last salary drawn. If the contribution is for more than 30 years, he is entitled 60 percent of the last salary drawn as pension.

Q: How could a worker like a farmer, a daily paid labourer, a migrant worker, a threewheel driver, a salesman, fish or vegetable seller be a member of this pension scheme?

A: Such workers could also be members of the proposed pension scheme. They can obtain the relevant details from the Labour Department Head Office at Narahenpita. When a migrant worker wants to be a member of the scheme he/she should make an annual payment of Rs. 12,000 for ten years.

Q: If a private sector employee joins the pension scheme, will a certain percentage of money be deducted from his Employees Provident Fund (EPF) and debitted to the Pension Fund?

A: We never touch EPF funds of employees. As I said earlier, we deduct only two percent from the salary of workers for a period of 10 years.

Q: Will the pension go to the spouse in the case of death of the contributor?

A: No, but children under 18 years will be entitled to it.

Q: Can a private sector employee who has reached 60 years of age join the scheme?

A: As they have already retired from their work places they cannot be members in this scheme.

Q: Can an employee who is 54 years and still employed join the scheme?

A: Yes, but he will have to make the two percent contribution for a period of ten years.