Namal Rajapaksa stresses need for private sector pensions

The shock I felt as a youth who was witness to the violent reaction to the proposed private sector pension scheme by certain groups, political opportunism and the unfortunate death of a youth prompted me to write this letter, said Hambantota MP Namal Rajapaksa.

“A considerable number of privileges and rights was denied to the working class in the country due to the constant friction between the actual political needs and opportunism. Consequently, I feel I should explain my stand on these issues.

Importance

I strongly believe that private sector employees should be entitled to a pension. My aim here is not merely to discuss the proposed private sector pension scheme, but consider it a practical step, concept and policy-wise. It is also our responsibility to go into the history of this matter without being politically prejudiced. The concept of the private sector pension scheme could be traced to an agreement reached at a seminar jointly sponsored by the Sri Lanka government, and its Norwegian counterpart and International Labour Organisation under the patronage of the then President J.R. Jayewardene. The then government accepted in principle that, “a social insurance pension scheme should be introduced for members of Sri Lanka’s Employment Provident Fund scheme.”

The UNP government, made every effort to give immediate effect to this proposal during 1982-83 and the regulations were drafted and a large number of workshops held the following year. The Cabinet on March 16, 1988 directed the Labour Minister at the time to draft the Bill for the proposed pension scheme. Most of the Ministers in President Premadasa’s Cabinet extended their support to the proposal in writing. Despite opposition from various quarters, it was held in common that a pension scheme for the private sector was essential. Criticism was mainly directed against its practicability. We have observed that unwarranted interventions by the bureaucrats responsible for its practical implementation had misled all parties such as politicians, employers and employees and it persists to this day.

Social necessity

Former President Chandrika Bandaranaike Kumaratunga’s election manifesto too had included the private sector pension scheme. I believe that this novel scheme is a real social necessity and a commitment on the part of politicians as it had been accepted by the Jayewardene, Premadasa, Kumaratunga and Rajapaksa governments.

Failure on the part of the politicians to fulfil this vital social obligation to date as I pointed out earlier, could be attributed to the contradiction between political opportunism and the actual political needs. I deplore this opportunism both as a citizen of this country and as a youth.

Many political parties were busy organising protest campaigns against the unfortunate death of the Free Trade Zone employee, Roshen Chanaka. It was, however, doubtful whether there was even a handful of people who did anything for his survival. It is equally horrendous that there were certain elements who awaited his death, while the government was leaving no stone unturned to save his life. The mechanism to give effect to this piece of legislation ought to be practical and based on the needs in the private sector. In the case of a pension or any privilege, it is important that the husband or wife as the case may be, should be made beneficiaries. It is also not possible to make certain female employees entitled to a long-term pension scheme due to the relatively shorter tenure of their service.

International developments in the private sector pension schemes are a matter of concern for us, since during the preceding two decades many reforms were introduced to the State and private sector pension schemes in countries such as Canada, Finland, Korea, Mexico and Chile.

The recent world economic meltdown had a serious impact on private sector pensions. It also had its effect on the State sector pensions. According to World Bank reports, the private sector pension reserves in advanced countries dropped by $ 3.3 trillion, which is a 20 percent reduction compared to 2007. The rapid drop in the private sector pension reserves in foreign countries had a deleterious effect on the mental integrity of the victimised workers. This in turn, has a direct bearing on the State fiscal policy. My analysis of the international situation does not in any way devalue the proposed private sector pension scheme.

Flexible

The mechanism to give effect to the scheme should be properly equipped and made flexible to face future challenges. The success of any State policy depends on its competence to understand the challenges of the youth.

It is of paramount importance for politicians and the bureaucracy to understand today’s youth aspirations in their proper perspective.

In conclusion I wish to reiterate the need for a pension scheme which could guarantee the social security of private sector employees. However it has not been possible to insulate the important social sectors from opportunistic politics, self-willed officialdom and other vitiating elements. The Tenant Farmers’ Act is a classic example. It is only through our past political experiences and social realities that a private sector pension scheme could be formulated.”

Translated by K.D.M. Kittanpahuwa