Sri Lanka should return approximately 20% of the balances amounting to around Rs.500 billion of the Employees Provident Fund (EPF) lying to the credit of members, directly to members after the current COVID- 19 pandemic ends, former Central Bank Governor and current Senior Advisor on Economic Affairs to the Prime Minister Ajith Nivard Cabraal said.
As an alternative to providing a direct fiscal hand-out, around Rs.500 billion could be infused into the economy by unconditionally returning around 20% of the EPF Member balances to the respective Members, out of the total of around Rs.2, 500 billion lying to the credit of the EPF members as at 31st December 2019,” Cabraal said
It has also been revealed that the EPF dormant account has sky rocketed to a new high and the authorities should look into this matter.
Many Sri Lankans are in the habit of changing jobs frequently and they may have several Employees Provident Fund (EPF) accounts and at least one or more could be inoperative.
This was due to the practice of opening a new account for them by employers, and employees may have forgotten to transfer, amalgamate or withdraw money from their previous accounts, which become dormant.
According to official provisional estimates, over 1.8 million EPF accounts are inactive with an accumulated amount of around Rs.1 trillion lying in dormant accounts at present.
An account becomes inactive, if no contribution is made for less than three years consecutively.
The need to assist such members has arisen to trace and revive accounts, which once retrieved can be amalgamated to their present EPF accounts. This could be done by establishing a help desk at the Labour Department or the Central Bank, a senior Labour ministry official suggested.
According to the Auditor General’s Department published data, the contribution credited to 1.2 million dormant members’ accounts amounted to around Rs.633 billion while the interest credited for those account-holders for the year 2014 amounted to Rs. 63.54 billion.
It has now jumped to Rs. 1 trillion credited to dormant members’ accounts, official provisional data showed.
(LI)