06/17/2011, 00.00
SRI LANKA
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Unions demand Colombo cancel pension reform

by Melani Manel Perera
The government is set to approve the new pension scheme (Private Sector Pension Bill) to obtain loans from the International Monetary Fund. In late May, workers demonstrated against the "misleading" reform. One youth dies in police charge.
Colombo (AsiaNews) - The United Federation of Labour (UFL) calls on the government of Sri Lanka to remove the new pension scheme (Private Sector Pension Bill) from the package of reforms. Since its announcement several groups of workers, particularly those of the Free Trade Zone, have criticized the bill, considered misleading because, in fact, it does not guarantee a lifetime pension for workers (see AsiaNews, " Sri Lanka: pension guaranteed "until funds run out"). In late May, 18 thousand workers staged a demonstration against the Private Sector Pension Bill. The protests ended in tragedy: the police charged the workers, and among the many wounded Roshen Chanaka, 21, died.

Linus Jayatilake, Catholic and president of the UFL, said: "Young workers have shed their blood and risked their lives to defend their rights and their financial resources. No government, no authority can take away their hard-earned money. "

On 3 June, following the clashes between workers and police, the Ministry of Labour said that it would withdraw the proposal on the new pension scheme. A few days later, however, on June 7, on the popular Sinhala daily Lankadeepa the news appeared that "certain ministerial sources" announced that the parliament had confirmed the old bill, only with some amendments.

"Everyone knows what is behind the Private Sector Pension Bill: it is not a new pension scheme for the private sector - Jayatilake says - but only an effort to start a fund in which to accumulate the the country’s capital."

The new pension bill divides pension fund contributions into three new categories - employees and self-employed, foreign workers - and provides the worker with a pension "as long as funds last." In practice, for 10 years each worker will deposit a fixed percentage of their wages to fund membership, which they accumulate in their own lifetime, but once the money "set aside" finishes the person is no longer entitled to a pension.

According Jayatilake "the government wants to show the IMF (International Monetary Fund) it has its own share capital (private equity investor), so to obtain loans from the IMF. For this reason, Colombo will try to scrape together all the financial resources available in the country. " In 2010 the total assets from the EPF (Employees 'Provident Fund) and ETF (Employees' Trust Fund) - the existing pension funds - was 1.027 billion rupees (about 940 billion dollars). If the new pension scheme comes into force "EPF and ETF funds will be poured into the new scheme” says Jayatilake.
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See also
Workers to Sri Lankan government: Stop speculating on our pensions
04/06/2012
Sri Lanka: pension guaranteed "until funds run out"
17/05/2011
Protest against press censorship
24/01/2007
Many workers will not celebrate May Day in Sri Lanka
30/04/2008
Police charge 18,000 workers, Catholics condemn the crackdown
31/05/2011


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