The Employees' Provident Fund (EPF) was established under the Act No. 15 of 1958. It is the largest Social Security Scheme in Sri Lanka with an asset base of Rs.1300 billion as at December 2013, equivalent to 15% of the GDP. The EPF offers a joint action plan by the employer and the employee to save for the future retirement life of the employees in the Corporate and Private Sector.

Fund Management

As at end 2013, the Employees’ Provident Fund (i.e. total liability to the members) stood at Rs. 1281.9 billion recording a considerable increase of 14 per cent from Rs. 1124.5 billion as at end 2012. Increase in both the income of the Fund and the member contributions were the main drivers of the growth of the Fund.

Investment of Funds

As a long term retirement benefit scheme, the investment policy of the Fund is focused on providing a long term positive real rate of return to the members while safeguarding the value of the Fund and maintaining sufficient liquidity. Hence a major portion of funds is placed with Government securities while the balance is invested in fundamentally sound listed and unlisted equities and high credit worthy corporate debt instruments. In order to maintain an optimal liquidity position, a smaller percentage of EPF funds are invested in high liquid securities such as Reverse Repurchase agreements.

Investment Portfolio

The total investment portfolio (Book Value) of the Fund grew by 13.7 per cent from Rs.1,105.5 billion in 2012 to Rs. 1,257.3 billion in 2013. The investment policy of the Fund continued to focus on providing a long-term positive real rate of return to the members while ensuring the safety of funds and maintaining a sufficient level of liquidity to meet refund payments and other expenses of the Fund. Accordingly, the investment portfolio consisted of 92.5 per cent in government securities 5.8 per cent in equity and 1.2 per cent in corporate debentures. Theremaining 0.5 per cent was invested in high liquid assets such as Reverse – Repos on government securities to maintain day to day liquidity requirement.

Type of Investment

2012(a)

2013(a)

(Rs.bn.)

Share (%)

(Rs.bn.)

Share (%)

Treasury Bonds &Bills

1,012.1

91.5

1,140.5

90.7

Rupees Loans to Government

23.1

2.1

23.1

1.8

Corporate Debentures

8.0

0.7

14.3

1.2

Equity

59.2

5.4

72.8

5.8

Reverse Repos

3.1

0.3

6.6

0.5

Total

1,105.5

100.0

1,257.3

100.0


(a) Unaudited

Investment Income

The Fund earned a total income of Rs. 136.7 billion in 2013, recording an increase of 12.6 per cent compared to that of the previous year. Interest income was the major source of income (76.9 per cent of the income) to the Fund. Interest income grew by 15.5 per cent from Rs. 90.9 billion in 2012 to Rs.105.0 billion in2013. Further, income generated from equity portfolio, which included both capital gains and dividends, increased by 10.7 per cent to Rs. 3,339 million in 2013, compared to Rs. 3,016 million earned in 2012. However, amortization gains from discounted Treasury bonds reduced by 3.0 per cent to Rs. 26.9 billion in 2013 from Rs. 27.8 billion in 2012.

Source of Income

2012 (a)

2013 (a)

(Rs.mn.)

Share (%)

(Rs.mn.)

Share (%)

Interest

90,904

74.9

105,038

76.9

Amortized gain

27,792

22.9

26,956

19.7

Capital gain from Government Securities

34

..

1,019

0.7

Marked to market gain/loss

(388)

(0.3)

(45)

..

Capital gains from Equity

1,020

0.8

113

0.1

Dividends

1,996

1.6

3,226

2.4

Other

55

0.1

350

0.2

Total

121,413

100.0

136,657

100.0


(a) Unaudited Source: EPF Department, Central Bank of Sri Lanka

Maturity Profile of the Government Securities Portfolio as at end 2013(a)

Maturity

Amount (Rs. mn.)

Share
(%)

Weighted Average Yield (%)

Less than 1 year

139.5

10.0

9.79

1-2 years

195.7

14.1

9.84

3-4 years

216.2

15.5

10.75

More than 5 years

842.0

60.4

11.92

Total

1,393.4

100.0

11.23

Members / Employees
Employers

When leaving service on reaching age of retirement.

  • 1) Males - 55 years
  • 2) Females - 50 years

When leaving service on grounds of marriage in the following context
(For female Employees)

  • 1) If married within 3 months of leaving service
  • 2) Have left service within 5 years of marriage
A certified photocopy of the Marriage Certificate certified by the Registrar who registered the marriage or a marriage certificate issued by the Additional District Registrar should be submitted along with the above forms.

When migrating to another country on a permanent Visa

  • 1) The permanent Visa and a photocopy
  • 2) The Original of the passport and a photocopy along with the above forms should be submitted to the Head Office of the Labour Department

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