Private sector pension in the pipeline, says UNP

• Charges another attempt to resurrect controversial private pension plan, accuses CB of bad governance in EPF
• Wants Amendment postponed and all stakeholders consulted
• Says country’s largest fund should not be used for 30-storey high rise

By Uditha Jayasinghe

The Central Bank and the Government came under fire yesterday over the function of the Employees’ Provident Fund (EPF), with UNP MP Dr. Harsha de Silva demanding that the proposed Amendments to the EPF Act be withdrawn as it would pave the way for the controversial private sector pension plan to be resurrected.

UNP MP Dr. Harsha de Silva at yesterday's briefing flags off the picture which showed President Mahinda Rajapaksa inspecting the model of the proposed tower of the EPF for which he laid the foundation stone in 2009. One of the clauses of the new amendment to EPF Act proposed will finance the tower – Pic by Upul Abayasekara

The EPF is currently valued at Rs. 1 trillion and is the largest fund in the country.

While reiterating that the UNP is not against a private pension plan, provided that all stakeholders are consulted first, Dr. de Silva blasted the Government for disregarding the consequences of attempting to bring a crucial bill in through the back door.

“The Government must remember that not consulting with stakeholders cost the life of 21-year-old Roshen Chanaka and is shamelessly attempting to do the same thing again.”

In an acerbic denunciation of the Government and the Central Bank, Dr. de Silva pointed out that among the seven clauses are two points that need immediate consideration. One is Clause 6 that will establish an “Insurance scheme or a pension scheme”. The other is Clause 3, which will enable EPF funds to be used to build a 30-storey building.    

Terming the Amendment as an “achcharu panatha,” the MP recalled that the EPF had a dual regulation where the administration was done by the Labour Commissioner but the actual funds were the responsibility of the Central Bank. He charged that there was no point in establishing a pension fund under the EPF since the Labour Commission did not have the authority or money for it to function.

“The EPF money is controlled by the Central Bank. This is why the private pension act was presented by the President in his capacity as the Finance Minister. But the EPF Amendment is being presented by the Labour Minister with a clause to establish a pension fund.The move has no substance because the Labour Commission does not have the power to use EPF funds, but it can pave the way for the older private pension bill, which was never removed from the Parliament Order Book, to be brought in afterwards.”

He further charged that the Government was misusing billions of EPF funds to construct a 30-storey building, which would house the EPF, ETF and Labour Commission. Holding out documents, he showed how Rs. 268 million had already been passed for this during the time when Ministers Mervyn Silva and AthaudaSeneviratne were office holders. However, even though the President laid the foundation stone in Narahenpita, this was not completed and billions will be funnelled to this if the amendment is passed, he said.

“This is our money. The Government or the Central Bank does not have a right to use it without consulting us. Under the EPF Act, the Central Bank must present an annual report to the Auditor General and other stakeholders but not even the 2010 document has been released. It is ironic that Central Bank Governor AjithNivaardCabraal presents awards for annual reports and is on selection panels to select the best of them but does not release his own.”

This lapse points to a clear disregard for good governance, Dr. de Silva charged, noting that the appointment of Deputy Governor Deerasinghe to the Commercial Bank Board was unethical given his long record at the Central Bank and the fact that his wife is the Head of the EPF.