By The Pulseline News Desk
For millions of Sri Lankan workers, the Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF) represent more than financial institutions. They are vital pillars of social protection, providing savings and security for retirement after decades of employment.
Now, the government is exploring a significant reform that could reshape the administration of these two funds. Cabinet has approved the appointment of a Senior Officials Committee to study the feasibility of bringing the EPF and ETF under a single integrated governance framework managed by a tripartite board representing the government, employers, and employees.
The move marks the beginning of what could become one of the most important institutional reforms in Sri Lanka’s social security sector in recent years.
Two major funds, one shared objective
The EPF and ETF have long served the same broad purpose of safeguarding workers’ financial futures, although they operate under different legal and administrative structures.
Established under the Employees’ Provident Fund Act No. 15 of 1958, the EPF is the country’s largest retirement savings fund. It currently serves more than 2.5 million members and manages assets exceeding Rs. 4.9 trillion, making it one of the largest institutional investors in the country.
The fund’s operations are currently divided between two institutions. The Central Bank of Sri Lanka (CBSL) is responsible for custodianship, investment management, financial administration, and benefit payments, while the Department of Labour oversees registration, compliance monitoring, recovery of arrears, and the protection of employees’ rights.
The ETF, established under the Employees’ Trust Fund Act No. 46 of 1980, operates under a different governance model. Managed by a tripartite board comprising representatives of employers, employees, and the government, the fund serves more than 3 million active members and manages assets exceeding Rs. 637.5 billion.
Despite differences in administration, both funds are ultimately designed to provide financial security to workers and their families.
Considering reforms
As labour markets evolve and expectations surrounding social protection increase, policymakers are examining whether a more integrated governance framework could improve efficiency, accountability, and oversight.
The government notes that the tripartite governance model adopted by the ETF reflects internationally recognised best practices in social security administration. Such models are widely promoted by the International Labour Organisation (ILO) because they ensure that workers and employers have a direct voice in decision-making processes affecting retirement and social protection funds.
Supporters of a unified governance structure argue that bringing the two funds under a common oversight mechanism could enhance coordination, reduce duplication, strengthen transparency, and improve long-term strategic planning.
At the same time, any reform would need to safeguard the independence, financial stability, and legal protections associated with both funds.
Protecting workers’ savings
Perhaps the most critical issue in any proposed restructuring will be maintaining public confidence in the management of workers’ savings.
Together, EPF and ETF manage assets worth more than Rs. 5.5 trillion, representing the retirement security of millions of employees across both the public and private sectors.
Recognising the sensitivity of the issue, the government has emphasised that the proposed review will focus on strengthening legal and financial safeguards for members’ assets while examining governance improvements.
The newly appointed Senior Officials Committee is expected to conduct a comprehensive assessment of international experiences, governance models, regulatory frameworks, and institutional arrangements before making recommendations.
Learning from international practice
Globally, many countries have moved towards governance structures that incorporate representation from governments, employers, and workers. These tripartite systems are often viewed as mechanisms that promote transparency, accountability, and stakeholder participation.
By ensuring that key stakeholders have a seat at the decision-making table, such arrangements seek to balance financial sustainability with the interests of contributors and beneficiaries.
For Sri Lanka, adopting elements of these international models could potentially modernise the governance of social security funds while aligning local practices with global standards.
The road ahead
The Cabinet decision does not immediately alter the operations of either fund. Instead, it initiates a study process aimed at determining whether integration is practical, beneficial, and legally feasible.
The recommendations of the Senior Officials Committee will likely shape future discussions on social security reform and retirement savings management in Sri Lanka.
For millions of workers who contribute to the EPF and ETF every month, the outcome of this review could have long-term implications for how their savings are managed and protected. As the government examines the possibility of a unified governance framework, the challenge will be to balance efficiency and reform with the trust and security that workers expect from the institutions safeguarding their future.
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