Loan system to replace pension gratuity scheme?

Thursday, 6 March 2014 01:06 - - {{hitsCtrl.values.hits}}

Government plans to introduce a loan system to replace the longstanding pension gratuity scheme, an entitlement to all State employees at the time of retirement came under fire yesterday at Parliament with Leader of Janatha Vimukthi Peramuna MP Anura Kumara Dissanayake making a statement under Standing Order 23 (2). The pension gratuity scheme is an additional benefit a retiree would enjoy apart from the regular pension received. “Pension gratuity allows the retiree to obtain a lump-sum equal to two years’ salary at the time of retiring and allow the Government to recover it in interest free instalments spanning over a period of 10 years," MP Dissanayake said. "With the proposed system, the Government will provide a bank loan instead of the pension gratuity,” revealed MP Dissanayake, who feared the impact interest component and shrewd recovery measures followed by the lending institutions. Seeking the total number of State employees yet to receive the pension gratuity, and the reasons for such delays, and the model applied for the proposed bank loan system intended to replace the pension gratuity, MP Dissanayake said: “Receiving two years’ salary at the time of retirement was a relief for the pensioners. Pensioners were supposed to obtain it immediately or within a period of one month after retiring. But even after two year many of the pensioners have failed to obtain the pension gratuity.” Government response is expected this week.

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