The Hon. Ravi Karunanayake

¶ 01 Hon. Speaker, I wish to ask the following Question under Standing Order No. 27(2) from the Hon. Minister of Finance, Planning and Economic Development on the establishment of an independent Employees’ Provident Fund Authority.

¶ 02 The Employees’ Provident Fund (EPF), created under Act No. 15 of 1958, now exceeds Rs. 5 trillion, representing the savings of 2.6 million active contributors and millions of dormant members. It is the largest pool of worker savings in Sri Lanka and a major captive source. Despite this, the EPF remains under the administration of the Central Bank of Sri Lanka (CBSL), whose statutory role was redefined by Act No. 16 of 2023 as an independent monetary authority ensuring price stability, financial system stability and regulatory oversight. CBSL is neither structured nor mandated to manage a social security fund; its dual role as regulator and operator creates a conflict of interest.

¶ 03 Over 90 per cent of EPF assets are concentrated in Government securities, yielding sub-optimal returns, while equity holdings in regulated banks raise concerns of regulatory imbalance. International practice shows provident funds are best managed by autonomous authorities—EPFO (India), KWSP (Malaysia), CPF (Singapore), NPS (Korea)—ensuring transparency, diversification and stronger returns without conflicts.

¶ 04 Therefore, will the Hon. Minister state: 1. whether the Government recognizes a conflict of interest in CBSL’s dual role under Act No. 16 of 2023; 2. whether steps will be taken to establish an independent EPF Authority with its own governance, professional management and parliamentary oversight; 3. the current total asset value and investment composition of the EPF, and whether concentration in Government securities has reduced real returns (Central Bank’s EPF gets about 30 per cent while ordinary contributors get about 11 per cent); 4. why, despite IMF recommendations removing debt management from CBSL to avoid policy conflicts, the EPF was retained, and whether this inconsistency will be rectified; 5. whether EPF equity holdings in regulated banks create undue advantage and how that is addressed; 6. whether independent audits, actuarial valuations or performance reviews were conducted over the past three years and whether such reports will be tabled; if not, why; 7. whether EPF operations will be digitized for transparency and efficiency; 8. whether international models have been studied and if a conflict-of-interest code for CBSL officers exists; if so, whether it will be tabled; 9. whether the Government has considered amalgamating EPF and ETF into a single independent Authority to reduce duplication and improve efficiency?

¶ 05 Thank you.