EFC submits comprehensive roadmap on good governance in social security institutions to Labour Minister

EFC Director General Vajira Ellepola (left) hands over the position paper to Labour Minister Dr. Anil Jayantha Fernando

The Employers’ Federation of Ceylon (EFC) has formally presented the position paper titled “Preserving beneficiary interests in Sri Lanka’s social security institutions through good governance” to Labour Minister Dr. Anil Jayantha Fernando. 

This development marks a significant milestone in the ongoing efforts to strengthen the governance, accountability, and sustainability of Sri Lanka’s key social security institutions, the Employees’ Provident Fund (EPF) and the Employees’ Trust Fund (ETF).

The EFC, in collaboration with the International Labour Organisation’s Bureau for Employers’ Activities (ILO/ACTEMP) and International Training Centre of the International Labour Organization (ITC/ILO), took the initiative to establish a dedicated EFC Employers’ Network on Social Security aimed at fostering dialogue with policymakers and stakeholders to promote good governance within Sri Lanka’s social security schemes. As an initial phase in developing this network, EFC extended invitations to representatives from several leading companies and institutions to contribute their insights on the pressing challenges and policy issues surrounding the country’s social security system.

Based on the deliberations made through the EFC Employers’ Network on Social Security, a position paper was developed by Nisha Arunathilake, Suresh Ranasinghe and Himani Vithanage. The paper benefitted from the technical support extended by Ravi Peiris (ILO ACT/EMP) and Paolo Salvai (ITC – ILO Turin).

The position paper brings together the collective insights and recommendations that emerged from a series of stakeholder discussions and technical workshops conducted by the EFC, in collaboration with ILO ACT/EMP and ITC-ILO Turin, with the aim of reforming the governance structures of Sri Lanka’s key social security schemes.

Offering a detailed examination of Sri Lanka’s social security framework, the paper delves into several key thematic areas such as the importance of balanced representation and transparency as pillars of good governance. It reviews the best global practices for the selection and composition of governing boards, evaluates the existing operational and institutional structure of the EPF and ETF, and critically assesses their investment strategies. The paper also highlights the growing significance of ICT in modernising and streamlining the administration of these social security systems.

The position paper puts forward several key recommendations aimed at strengthening the governance and effectiveness of Sri Lanka’s social security systems. It calls for immediate legislative amendments to ensure balanced and effective representation of both workers and employers on the governing boards of the EPF and ETF. The paper also recommends the inclusion of minimum qualification and experience requirements for board members to enhance professional oversight. Additionally, the establishment of an independent investment committee within the ETF, free from external influence and comprised of qualified investment professionals, is advocated. Finally, the paper underscores the importance of introducing a unique identification number for each member within the EPF and ETF systems to improve tracking and transparency.

Drawing on global examples, the paper highlights that strong governance practices form a universal foundation for the success and effectiveness of social security systems.