The Cabinet of Ministers at its meeting on Monday has cleared a proposal by President Ranil Wickremesinghe to prepare a law to set up a contributory pension fund for new public sector employees.

“The proposed contributory fund will help State workers get a pension without being a burden to the country,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said.

Accordingly, the employees will contribute 8% and the Government will contribute 12% to the fund.

“Public sector employees who joined after 2016, can also opt to join the scheme voluntarily,” he added.

He also recalled that a contributory pension scheme was proposed by the 2001 Government to strengthen the State finances, but was not implemented by the regime elected thereafter.

“If the Financial Responsibility Management Act, 2003 was implemented, Sri Lanka would not have defaulted in 2022,” Gunawardena said.

At present Sri Lanka has over 1.5 million public sector employees and the size had doubled over the past 15 years. The State sector workers are paid by tax revenue via an unfunded pension scheme.

Cabinet nod to open up aviation fuel market