{"id":239,"date":"2016-08-30T04:21:18","date_gmt":"2016-08-30T04:21:18","guid":{"rendered":"http:\/\/192.168.1.55\/cbepf\/?page_id=239"},"modified":"2026-06-03T14:17:11","modified_gmt":"2026-06-03T08:47:11","slug":"fund-management","status":"publish","type":"page","link":"https:\/\/epf.lk\/?page_id=239","title":{"rendered":"Fund Management"},"content":{"rendered":"

Section 5 (1) e of the EPF Act provides CBSL to invest EPF\u2019s funds that are not immediately required for the purposes outlined in the Act. These funds may be directed into various securities that CBSL deems appropriate and is also authorized to sell these securities. The funds are invested considering the objectives of EPF to provide a reasonable risk-adjusted return while ensuring the safety of the Fund. Such investments are made through a prudent and innovative fund management process, with the ultimate goal of providing maximum retirement benefits to the members.<\/p>\n

Fund Management<\/h5>\n

The total investment portfolio (book value) of the Fund grew by 13 per cent to Rs. 4,965.2 billion as at end 2025 from Rs. 4,393.8 billion recorded as at end 2024. As at end 2025, the investment portfolio consisted of 94.5 per cent in government securities, 4.3 per cent in equity, 0.6 per cent in corporate debentures and the remaining 0.6 per cent in reverse repurchase agreements (Table 1).<\/p>\n

Table 1: Investment Portfolio<\/h5>\n\n\n\n\n\n\n\n\n\n
Type of Investment<\/th>\n2025<\/th>\n2024<\/th>\n<\/tr>\n
Amount(Rs.bn.)<\/th>\nShare (%)<\/th>\nAmount (Rs.bn.)<\/th>\nShare (%)<\/th>\n<\/tr>\n
Treasury Bonds & Bills<\/td>\n4,693.0<\/td>\n94.5<\/td>\n4,153.3<\/td>\n94.5<\/td>\n<\/tr>\n
Equities<\/td>\n214.1<\/td>\n4.3<\/td>\n193.4<\/td>\n4.4<\/td>\n<\/tr>\n
Corporate Debt Instruments<\/td>\n29.3<\/td>\n0.6<\/td>\n12.9<\/td>\n0.3<\/td>\n<\/tr>\n
Reverse Repos<\/td>\n28.8<\/td>\n0.6<\/td>\n34.2<\/td>\n0.8<\/td>\n<\/tr>\n
Total<\/th>\n4,965.2<\/th>\n100.0<\/th>\n4,393.8<\/th>\n100.0<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n

In 2025, the total investment income of the Fund amounted to Rs. 552.7 billion (Table 2). The major source of income was interest income, and it grew by 11.4 per cent to Rs.506.9 billion in 2025 from Rs. 455.1 billion in 2024. Net gain\/ (loss) on financial instruments at fair value consisted of fair value\/ (loss) from both listed and unlisted equities. Gains from listed equity amounting to Rs. 54 billion was supported by favorable price movements in the Colombo Stock Exchange. Furthermore, dividend income from the equity portfolio surged to Rs.6.6 billion in 2025, compared to Rs. 5.5 billion in 2024.<\/p>\n

Table 2: Income on Investments<\/h5>\n\n\n\n\n\n\n\n\n\n
Source of Income<\/th>\n2025<\/th>\n2024<\/th>\n<\/tr>\n
Amount(Rs.mn)<\/th>\nShare (%)<\/th>\nAmount (Rs.mn)<\/th>\nShare (%)<\/th>\n<\/tr>\n
Interest Income<\/td>\n506,954.2<\/td>\n91.7<\/td>\n455,126.0<\/td>\n88.6<\/td>\n<\/tr>\n
Net gain \/ (loss) on FI at Fair Value <\/span><\/td>\n39,133.9<\/td>\n7.1<\/td>\n53,488.4<\/td>\n10.4<\/td>\n<\/tr>\n
Dividend Income
\n<\/span><\/td>\n		6,589.0<\/td>\n1.2<\/td>\n5,481.1<\/td>\n1.1<\/td>\n<\/tr>\n
Impairment of Financial Assets<\/td>\n(0.8)<\/td>\n(0.0)<\/td>\n(313.7)<\/td>\n(0.1)<\/td>\n<\/tr>\n
Total<\/th>\n552,676.4<\/th>\n100.0<\/th>\n513,781.7<\/th>\n100.0<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n

The majority of EPF\u2019s investment is in Treasury bonds. Over 75 per cent of the Treasury bond portfolio is invested in 5 years and above maturities with a Weighted Average Yield of 10.66 per cent . The maturity profile of the Treasury bond portfolio is given in Table 3.<\/p>\n

Table 3: Maturity Profile of the Treasury Bond Portfolio as at end 2025<\/h5>\n\n\n\n\n\n\n\n\n
Maturity<\/th>\nFace Value\u00a0 (Rs. mn.)<\/th>\nShare (%)<\/th>\nWeighted Average Yield (%)<\/th>\n<\/tr>\n
Less than 1 year<\/td>\n125,455.29<\/td>\n2.6%<\/span><\/td>\n11.38%<\/span><\/td>\n<\/tr>\n
1-2 years<\/td>\n254,942.68<\/td>\n5.3%<\/span><\/td>\n10.02%<\/td>\n<\/tr>\n
3-4 years<\/td>\n825,337.35<\/td>\n17.1%<\/span><\/td>\n11.82%<\/span><\/td>\n<\/tr>\n
5 year and above<\/td>\n3,628,782.29<\/td>\n75.1%<\/span><\/td>\n10.66%<\/span><\/td>\n<\/tr>\n
Total<\/th>\n4,834,517.61<\/th>\n100.0%<\/th>\n10.84%<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n
Overall Return of the Fund<\/h5>\n

The Fund earned a total gross income of Rs. 553.3 billion in 2025 (Table 4) and reported a net profit of Rs. 480.3 billion, derived after operating and tax expenditure. The EPF was able to earn a 11.81 per cent Return on Average Investment in 2025 while maintaining operating expenses at 0.62 per cent of the gross income.<\/p>\n

In accordance with Inland Revenue Act, No.24 of 2017, the income tax rate applicable for the Fund is 14 per cent since 01st April 2018. The applicable income tax rate for dividends received is 15 per cent. The tax expense increased to Rs. 69,511.2 million in 2025, an 8.4 per cent increase compared to Rs. 64,137.1 million in 2024.<\/p>\n

Accordingly, the EPF declared an interest rate of 10.75 per cent on balances lying to the credit of member accounts by the end 2025.<\/p>\n

The summary of performance indicators of the Fund of the last five years is given in Table 4 below.<\/p>\n

Table 4: <\/span>Five Year Summary of Key Performance Indicators <\/strong><\/h5>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Item<\/th>\nRs. million<\/th>\n<\/tr>\n
2021<\/th>\n2022<\/th>\n2023<\/th>\n2024<\/th>\n2025<\/th>\n<\/tr>\n
Interest Income<\/td>\n293,678<\/td>\n349,269<\/td>\n442,419<\/td>\n455,126<\/td>\n506,954<\/td>\n<\/tr>\n
Dividend Income<\/td>\n6,685<\/td>\n7,528<\/td>\n2,997<\/td>\n5,481<\/td>\n6,589<\/td>\n<\/tr>\n
Net gain \/ (loss) on FI at FV<\/td>\n41,840<\/td>\n(40,996)<\/td>\n35,683<\/td>\n53,488<\/td>\n39,134<\/td>\n<\/tr>\n
Impairment of Financial Assets<\/td>\n(1)<\/td>\n(4)<\/td>\n4<\/td>\n(314)<\/td>\n(1)<\/td>\n<\/tr>\n
Investment Income<\/th>\n342,203<\/th>\n315,797<\/th>\n481,103<\/th>\n513,782<\/th>\n552,676<\/th>\n<\/tr>\n
Other Income<\/td>\n172<\/span><\/td>\n270<\/span><\/td>\n241<\/span><\/td>\n326<\/span><\/td>\n610<\/span><\/td>\n<\/tr>\n
Gross Income<\/th>\n342,375<\/th>\n316,068<\/th>\n481,344<\/th>\n514,108<\/th>\n553,286<\/th>\n<\/tr>\n
Operating Expenditure<\/td>\n(1,646)<\/td>\n(2,134)<\/td>\n(2,305)<\/td>\n(3,045)<\/td>\n(3,466)<\/td>\n<\/tr>\n
Income Tax<\/td>\n(41,657)<\/td>\n(49,982)<\/td>\n(63,134)<\/td>\n(64,137)<\/td>\n(69,511)<\/td>\n<\/tr>\n
Profit for the Year<\/th>\n299,071<\/th>\n263,953<\/th>\n415,906<\/th>\n446,926<\/th>\n480,310<\/th>\n<\/tr>\n
Return on Average Investment (%)<\/td>\n11.4<\/td>\n9.5<\/td>\n13.0<\/td>\n12.4<\/td>\n11.8<\/td>\n<\/tr>\n
Interest Rate on Member Balances (%)<\/td>\n9.0<\/td>\n9.0<\/td>\n13.0<\/td>\n11.0<\/td>\n10.75<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
Governance Framework for Risk Management of Employees\u2019 Provident Fund<\/h5>\n

The Monetary Board (MB) of the CBSL as the custodian of the Fund is overseeing the risk management of the EPF. Accordingly, the risk management activities of EPF are also considered as an integral part of the Risk Governance structure of the CBSL which focuses on both financial and non-financial risks pertaining to all its activities including EPF\u2019s activities. MB is the ultimate decision making authority of the fund management activities of the EPF. It provides policy direction for the investment activities of the EPF fund and specifying the overall risk parameters, such as the risk appetite and risk tolerance levels within which the fund should be managed. Further, the MB is managing the respective activities through two high-level committees namely, Board Risk Oversight Committee (BROC) and EPF Investment Oversight Committee (EIOC) in order to strengthen the governance of the risk management structure the EPF.<\/p>\n

The BROC is responsible for overseeing the risk management function and the EIOC provides the highest level of oversight authority pertaining to the fund management activities. The role of the EIOC is to oversee the investment activities of the EPF by providing strategic and policy guidance for the management of the fund. Further, powers with respect to the day-to-day investment decision-making function of the EPF fund management activities have been delegated to the departmental level committee, the EPF Investment Committee (EIC). The Middle Office of the Fund Management Division of EPF oversee the daily operational risk aspects on a continuous basis as the First Line of Defense. Accordingly, both pre and post compliances of investment activities are monitored in line with the parameters provided in Investment Policy Statement (IPS), Strategic Asset Allocation (SAA) and Investment Guidelines (IG). The Risk Management Department (RMD) acts as the Second Line of Defense and responsible for providing the policy framework for the investment governance processin through an independent process of assessing, monitoring and reporting risks associated with the fund management activities of the EPF. Accordingly, providing applicable policy directions and guidelines relating to investment activities are handled by RMD through revising and updating the IPS, SAA and IG in line with updated market requirements, to improve the existing work procedures and to provide greater independence over the investment decision making process while maintaining an adequate level of internal controls.As the Third Line of Defense, Internal Audit Department provides risk assurance with regard to the fund management function of EPF.<\/p>\n

Further, a distinct mechanism is in place for escalation and addressing of non-financial risks related to the overall EPF Department\u2019s activities through a separate committee, the Non-financial Risk Management Committee (NFRMC). Accordingly, periodic reviews are conducted for identification and review of non-financial risks and to decide and monitor the risk mitigation actions thereon through RMD of CBSL.<\/p>\n","protected":false},"excerpt":{"rendered":"

Section 5 (1) e of the EPF Act provides CBSL to invest EPF\u2019s funds that are not immediately required for the purposes outlined in the Act. These funds may be directed into various securities that CBSL deems appropriate and is also authorized to sell these securities. The funds are invested considering the objectives of EPF […]<\/p>\n","protected":false},"author":1,"featured_media":4216,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"page-left-sidebar.php","meta":{"_links_to":"","_links_to_target":""},"_links":{"self":[{"href":"https:\/\/epf.lk\/index.php?rest_route=\/wp\/v2\/pages\/239"}],"collection":[{"href":"https:\/\/epf.lk\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/epf.lk\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/epf.lk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/epf.lk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=239"}],"version-history":[{"count":157,"href":"https:\/\/epf.lk\/index.php?rest_route=\/wp\/v2\/pages\/239\/revisions"}],"predecessor-version":[{"id":4134,"href":"https:\/\/epf.lk\/index.php?rest_route=\/wp\/v2\/pages\/239\/revisions\/4134"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/epf.lk\/index.php?rest_route=\/wp\/v2\/media\/4216"}],"wp:attachment":[{"href":"https:\/\/epf.lk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}