Govt. considering pension option for EPF members

LABOUR Deputy Minister Mahinda Jayasinghe yesterday told Parliament that amendments to the Employees' Provident Fund Act are being discussed at the tripartite National Labour Advisory Council, as the Government examines whether EPF contributors should be given the option of receiving a regular pension instead of a lump sum upon retirement.

- 

He said the proposal is aimed at strengthening long-term retirement income security for private sector and semi-Government workers amid demographic ageing, while retaining the existing lump-sum withdrawal framework for those who prefer it.

Addressing the House, Jayasinghe stressed that the Government is not seeking to dismantle or replace the EPF, which remains the primary social security mechanism for private sector employees. Instead, the Government is considering whether greater flexibility is needed to address income security risks faced by retirees who currently receive their savings as a single payment.

"EPF for the private sector and semi-Government is a social security scheme, but we have observed that the ability to access funds before retirement can have an impact in terms of social security," he said, noting that interim withdrawals and lump-sum payments can weaken retirement protection over time.

At present, EPF benefits are paid mainly as a lump sum upon retirement, set at 50 years for female members and 55 years for male members.

Limited early withdrawals are permitted for specific purposes, including housing construction and medical treatment, subject to eligibility criteria and documentation.