Active Citizenship for Development Network (ACDN) Briefing Paper No.

06 - December 2013 Centre for Society and Religion (CSR) Law & Society Trust (LST) National Fisheries Solidarity Movement (NAFSO) Uva Community Development Centre (UCDC)

Contact: Coordinator, ACDN Secretariat, c/o Centre for Society and Religion, 281, Deans Road, Colombo 10, Sri Lanka. T: 0777 370 098 E: pm.senarathna@gmail.com

Social Security for Farmers, Fishermen and Plantation workers

Introduction Social security schemes are focused on addressing vulnerabilities faced by individual workers and their families and providing some income support to overcome situations leading to a loss of income. Workers in the informal sector, including farmers and fisher folk face higher risks and vulnerabilities than employees in the formal sector. Estate workers continue to live in poor living conditions and have struggled to negotiate fair wages for their labour. Social security, as a means of ensuring basic economic protection is a crucial aspect, particularly for these vulnerable groups, though it provides only a narrow coverage against any loss of income they might face. Pension schemes for farmers and fisher folk and EPF/ETF contributions for plantation workers are the only source of income and savings for survival in their old age. In recent months the governments inability to pay pensions to farmers who have contributed to the pension fund has raised concerns about the state of social security provisions in Sri Lanka. Concerns have been raised as to whether a funding crisis similar to the one facing the farmers pension scheme will befall other pension and employee provident funds. The limitations of existing social security mechanisms undermine workers income after retirement. The Active Citizenship for Development Network (ACDN) has identified the key concerns relating to pension schemes and social security benefits to farmers, fisher folk and plantation workers via discussions in Citizens Forums. This briefing paper aims to raise awareness of the state of social security provisions, to stress the need for government action to address the issues facing farmers, fishermen and plantation workers and provide them with better social protection for the future. It reflects the viewpoints and suggestions of Citizens Forum members and their expectations from the state in terms of policy priorities on social welfare and development of the food production sector.
The right to social security, art 9, General comment No. 19, Committee on Economic Social and Cultural Rights 2 ILO Convention 102 on Social Security
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Overview of Social Security Schemes in Sri Lanka Social security refers to schemes developed to address the vulnerabilities of individual workers and their families for situations which lead to loss of income-earning capacity or need for health care. Income earning capacities may be affected by old age, sickness, maternity, unemployment, disability, occupational accidents and diseases. Ensuring adequate supply of social security benefits is articulated as a human right and of central importance to guaranteeing human dignity for all persons1. The International Labour Organization provides guidelines for developing and implementing social security provisions2. It provides a definition of social security and identifies a range of eventualities to be covered including access to medical care, sickness, unemployment, old age benefit, employment injury, family benefit, maternity benefit, invalidity benefit and survivors benefit. The Convention also articulates minimum standards for each contingency in terms of minimum level of benefits to be paid, coverage of persons, conditions for entitlement to benefits and duration of benefits. The existing social security schemes in Sri Lanka does not cover the full range of contingencies set out in the ILO Convention or meet the extent of coverage expected. However, Sri Lanka is leading in social security coverage in South Asia3. A fairly established scheme of old age pensions for public officers is the oldest social security scheme in place. Employee Provident Fund (EPF) and Employee Trust Fund (ETF) provisions ensure lump-sum payments at the time of retirement for formal private sector workers. Voluntary contributory pension schemes are available for workers in the informal economy. In addition, there are schemes providing coverage for disability, health care and schemes targeting the poor.

3Prabhu

& Iyer, 2001, South Asia Economic Journal 2: 31, Public Provision of Social Security: The Challenge in South Asia
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raised to Rs. 1 000 by subsequent gazette amendment in 1995, from a much lower amount introduced during the launch of the scheme. Increase in minimum pension payment was not accompanied by any change in the contribution schedule. From data gathered in Moneragala and Badulla areas farmers have received pension payments amounting to Rs. 1 000 Rs. 1 050 before the suspension of the scheme. The farmers pension scheme is implemented and managed by the Agricultural and Agrarian Insurance Board (AAIB)5, which was brought under the purview of the Finance Ministry in 2010. Pension fund investments have been made into Treasury Bills and Fixed Deposits. District Officers and Field officers are appointed at district level to carry activities at the grass roots levels. In addition promotional and enrolment activities are also carried out through the Agrarian Services Centres. Eligible farmers can enrol to the pension schemes by submitting duly filled applications to the Agrarian Services Centre or District Office of AAIB. The first instalment of premiums are collected by AAIB Officers and thereafter regular payments can be made through the authorized agents of AAIB, including Cooperative Rural Banks, Cooperative Societies Farmers Pension Scheme and post offices. The contributors under the regular The farmers pension scheme was established in 1987 as a payments are given a pass book after the first premium voluntary and nominally contributory scheme4. The payment which they must produce when making scheme provided coverage for both male and female subsequent payments6. workers whose main source of income is agriculture including livestock farming; approximately 2 million By the end of 2011 the Farmers pension scheme met with workers are estimated to be directly or indirectly engaged a crisis as it had exhausted all of its funds. Since January in agriculture. Eligibility requirements are based on the 2012, farmers who are entitled to receive pensions have types of crop cultivated and livestock raised, the amount of not been duly paid. Two years since, it is significant that no arable land owned, age and non-entitlement to other action has been taken to rectify this situation. A number of benefits. Farmers became eligible for pension payments on petitions have been filed to the Human Rights Commission completion of 60 years if enrolled between the ages of 18 regarding the non-payment of pensions to contributors of 54 or on completion of 5 years from the date of joining the the scheme. 125 petitions were collected and submitted by scheme if enrolled at 55- 59 years of age. The rate of the efforts of the Citizens Forum alone with respect to contributions is specified by government gazette notice Moneragala. and varies according to the age of enrolee and frequency of According to figures obtained from AAIB the number of payments. The farmer has the choice of paying the those enrolled in the scheme was 959 000 in January 2012 contributions on a regular periodic basis or as a one-off and 90 572 persons were receiving pensions. An additional payment made in the year of enrolment. 60 000 members have received eligibility since 2012 to An amendment made in 1995 allows for the surviving receive pensions. An amount of Rs. 135 million is required spouse to receive the same amount of pension until the to meet monthly pay outs. The Government transferred Rs. deceased spouse would have reached the age of 80. In 700 million in order to manage the crisis which too has addition to the provision of pensions, enrolees are entitled been proven insufficient to make the pension payments. to insurance benefits such as disability benefits, Given that the inquiries into this crisis have not been disablement gratuity and death gratuity. resolved the AAIB has avoided information regarding the 7 Pension entitlement ranges from a minimum of Rs. 1 000 situation of the funds . Discussions to recommence and up to Rs. 4 166 depending on the age of contributor at the proposals for a restructuring of the scheme are in progress. time of enrolment. The minimum payment figure was
4Farmers 5Agricultural

Pension and Social Security Benefit Scheme Act, No. 12 of 1987 Insurance Law, No 27, 1973 and Agriculture and Agrarian Insurance Act, No

20, 1999 6 A detailed discussion on the structure and process is provided in Erigama&RananEliya, 2003, Assessment of the Farmers and Fishermens Pension and Social Security Benefit Scheme in Sri Lanka, IPS
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A cabinet paper presentation has pointed towards inability to recover pension funds, parliamentary session on 2013/11/06 http://www.youtube.com/watch?v=Q3ibf2JAN_w&feature=youtu.be
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Fishermens Pension Scheme

The fishermens pension scheme was established in 1990 as a voluntary and nominally contributory scheme8 targeting an estimated number of 115 000 fishermen in the island. The scheme provided coverage for fishermen who are engaged in both marine fisheries and inland fishing. Eligibility requirements are primarily based on the ownership of assets, age and non-entitlement to other benefits. Fishermen became eligible for pension payments on completion of 60 years if enrolled between the ages of 18 54 or on completion of 5 years from the date of joining Employees are allowed to withdraw funds from the EPF the scheme if enrolled at 55- 59 years of age. when they reach the age of retirement, which is 55 for The structure and administration of the fishermens males and 50 for females. They are not allowed to pension is very similar to the farmers pension scheme. withdraw their funds during change of employment. Thus the rate of contributions, choice of the method of However, provisions allow members to withdraw if a paying contributions and insurance benefits offered are worker ceases to be employed after marriage in the case of female workers or due to a permanent and total incapacity similar to that of the farmers pension scheme. to work, and if the worker leaves the country with the While the fishermens pension scheme is implemented and intention of not returning to Sri Lanka. Members were also managed by the AAIB, the administrative activities are able to obtain housing loans guaranteeing an amount up to mostly decentralized and shared with the Department of 75 % of the balance of their EPF account12. The ETF allows Fisheries and Aquatic Resources Development. Thus, members to withdraw the balance of their individual enrolment of fishermen, collection of premium and accounts when they change employment. Benefit schemes promotional and propaganda activities are carried out by under ETF covers death benefits, permanent disability the Fisheries Extension Officers. The issuing of policies, insurance, assistance for hospitalisation, heart surgery, overall management of the fund and payment of pensions kidney transplant and eye implant, financial assistance to and other benefits are however, performed by AAIB. children of members who have passed with merit in public From data gathered in Negombo and Trincomalee areas examinations and Viyana housing scheme13. fishermen received on average an amount of Rs. 1 259 per The EPF is the largest social security scheme in Sri Lanka, month as pension payments. According to figures obtained and given the large assets has significant impact on the from AAIB 66 343 persons were enrolled in the scheme in fiscal status of the country. The fund has grown by 12.4 % 2012. 2 390 persons are currently receiving pensions. in 2012 to Rs. 1,144 billion from Rs. 1, 018 billion in 201114. Unlike the farmers pension scheme, the fishermens The EPF has an active membership of 2.25 million as of pension scheme is still functioning. However, fisher folk December 2012. The ETF has an asset value of Rs. 158 fear as to whether they will face the same fate as those billion and has 2.2 million active accounts as of December, enrolled in the farmers pension scheme. 201215. EPF, ETF schemes and plantation workers Plantation workers are entitled to the lump-sum payments The main schemes covering formal private sector provided by EPF and ETF funds as old age benefits at the employees are the Employees Provident Fund (EPF)9 and time of retirement. However, in spite of eligibility and Employees Trust Fund (ETF)10. There is also an Approved regular contributions, plantation workers face challenges Private Provident Funds created for certain occupations by when they try to withdraw their lump-sum benefits. This private companies. year the non-payment of EPF, ETF and gratuity payments These are mandatory contributory schemes and provide of three state-run estate companies amounting to Rs. 1.74 some income security to formal private sector employees billion and affecting 4000 workers was revealed when the on retirement. Both workers and employers are expected Ministry of Labour decided to act upon this case16. Many to make contributions of 8% and 12% of total earnings private estate companies, particularly small holding respectively each month for EPF schemes. The ETF is a companies too have defaulted on their contributions to EPF purely contributory scheme by employers amounting to and ETF and payments due to estate workers. 3% of gross wages. The responsibility of ensuring regular ETF and EPF contributions are made to the relevant funds
8Fishermens 9Employees

rests with the employers11. Both schemes enable old-age, disability and survivors benefits to workers in the form of a lump-sum payment amounting to contributions made by both workers and employers and accrued interest. Interest rates are governed by the Monetary Board under the Central Bank of Sri Lanka. The administration of the EPF scheme is managed by the Labour Department. The ETF board is responsible for the administration of the ETF fund, while overall responsibility lies with the Ministry of Finance.

Pension and Social Security Benefit Scheme Act, No. 23 of 1990 Provident Fund Act, No. 15 of 1958 10Employees Trust Fund Act, No. 46 of 1980 11Ranan Eliya & Eriyagama, 2003, Assessment of the Employees Provident Fund in Sri Lanka, IPS for more details on the structure and process of scheme 12Amendment to EPF Act in 2012, included Sec 32 A, allowing withdrawal of amount not exceeding 30 % of their balance for housing and medical treatment
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http://www.etfb.lk/ Ministry of Finance and Planning, Annual Report 2012 15 Ministry of Finance and Planning, Annual Report 2012 16http://www.sundaytimes.lk/130630/news/state-run-estates-see-the-wood-from-thetrees-to-settle-dues-50934.html
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Key Issues faced by farmers, fisher folk and estate workers

The Farmers Pension Scheme, Fishermens Pension Scheme, EPF and ETF are important social security provisions for farmers, fisher folk and plantation workers. However, short comings in the current system have failed to provide workers with an adequate income substitution after retirement. Pensioners point out that the small amounts they receive as pensions are not even sufficient to cover their medical expenses. The existing coverage for farmers and fisher folk are voluntary and contributory schemes with limited insurance provisions. The benefits offered do not reflect inflationary trends or cost of living increases. Given the higher risks faced by farmers and fisher folk in sustaining their livelihoods, there is a need for the expansion of existing schemes to ensure income security that is of adequate value. Lump-sum retirement payments are often spent on childrens needs, settling debts or building homes. Given that pension payments dont meet their retirement needs in a meaningful manner, workers are lacking enthusiasm to participate in the existing schemes. Given the overall decline of income levels of workers in the sectors of agriculture and fisheries and low wages of plantation workers, default rates are high.

Many workers complain of difficulties faced when trying to access the scheme due to inefficient administration, including problems encountered with mishandling of records and lack of proper documentation. Suspension of the farmers pension benefits has further eroded the enthusiasm of younger farmers to enrol in the scheme, while fisher folk say the amounts are insufficient to motivate them to contribute. Non-payment of EPF dues to plantation workers have reduced their confidence in the fund. Concerns have been raised about the recent shift in EPF investments from an earlier trend of investing into government securities to higher investments in equities and secondary market activities. The annual report of the EPF has not been submitted since 2010 and the public are unable to verify such claims. Earlier this year, the EPF was asked to disclose details regarding all transactions by the Parliamentary Committee on Public Accounts after funds were invested in loss making state-owned enterprises and companies listed on the Colombo Stock Exchange.
Composition of EPF Portfolio 201217

The crisis facing the Farmers Pension Scheme has revealed structural weaknesses. Popular decisions to revise contribution schedules were made without carrying out proper actuarial studies and planning to ensure sustainability of the schemes. The financial design of the pension schemes for farmers and fisher folk implies the need for partial funding by the government, via grants from the Ministry of Finance. The Government has not transferred the full contribution of funds that was promised at the inception of the farmers and fishermens schemes.
Challenges facing labour and informal sector employment

Labour practices in Sri Lanka have undergone gradual changes since liberal market policies were introduced in 1977. A steady flow of migrant workers have sort higher wage labour in countries abroad. While they have brought substantial foreign exchange earnings into the country, they endure numerous hardships and have very little social protection against such hardships faced abroad, the violation of labour rights or the loss of income. Similarly, local labour practices have also created harsher labour conditions for workers with unrestrained private sector management practices. Trade Unions highlight precarious labour as a major challenge currently facing the labour movements in Sri
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EPF Department, Ministry of Finance and Planning

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Lanka. Contract labour, flexible work and variable income government initiatives have only been rhetorical and have arrangements have helped employers to avoid mandatory failed to generate sufficient growth in these sectors. payroll compliances and reduce their labour costs. Sector GDP Growth (%)21 However, with such labour arrangements the risks associated with employment are effectively transferred to the workers. Employees must be prepared for sudden loss of employment with little compensation. The burden of meeting daily living needs and saving for such contingencies out of their wages earned is placed on the workers. Those falling within the lower wage bracket, such as plantation workers, dont have the means to save for any loss of employment. While such shifts in labour practices are affecting those employed in the formal sector, informal sector workers have always faced higher risks due to the conditions of their work.
Employed Population by Sector18

Those employed in the informal sector form the majority of the work force in Sri Lanka. They are largely dependent on the rural economy for sustenance.
Employed Population in Formal and Informal Sectors19

The informal sector workers particularly in fisheries and farming face challenges due to the volatile fluctuations in incomes. Changing climate situations and natural disasters affect their capacity to make a living and expose them to much risk. Such work also requires capital inducements in terms of equipment and tools, seeds and fertilizers, fuel costs and cost of labour. Farmers and fishermen finance their need for capital by obtaining loans which they hope to pay back with their earnings. When their efforts fail to generate adequate incomes, they are left in dire conditions unable to meet their daily needs. Furthermore, they are also burdened with debt as they are unable to pay back loans. Next, in this context state investments in the food production sector are also not prioritised. Successive governments have conveyed an interest in becoming selfsufficient in food production, particularly in agriculture (36 000 MT of rice was imported in 2012)20. However,

The bulk of government expenditure into the food production sector is spent on providing fertilizer subsidies for agriculture and limited fuel subsidies for fishermen. Such pay outs were largely given in order to safeguard their voter base. However, workers feel that government subsidy programmes have been a failure as it does not meet required demands. Furthermore, few effective investments have gone into developing the agriculture and fisheries sectors. Capital expenditure allocations announced for the Ministry of Agriculture and Ministry of Fisheries and Aquatic Resources Development in total is a mere Rs. 6.27 Bn22. The utilization of capital expenditure allocations have not resulted in any sustainable development initiatives. Overall economic policies of the government have focused on infrastructure development and less on boosting production or industries.
Distribution of fertilizers to Paddy farmers - 2012

In addition to the worrying trend of low priority for investments in food production, workers are faced with land and water issues, and direct competition from imported goods. The use of modern equipment and technologies are necessary to remain competitive in the
21 22

Annual Report 2012, Labour Force Survey Annual Report, 2012, Labour Force Survey 20 Ministry of Finance and Planning, Annual Report 2012
18 19

Ministry of Finance and Planning, Annual Report 2012 Appropriation Bill 2014

market, however lack of capital restricts their ability to largely accepted as the most effective mechanism to tackle invest in such technologies. old age poverty24.The recently formulated National Human Income levels of farmers, fisher folk and plantation Resources and Employment Policy has recommended the workers are no longer sufficient to meet their day to day integration of existing social security systems developed in 25 expenses. This is because of the soaring cost of equipment parallel ministries and agencies . In addition it proposes and rising cost of living. Their immediate concerns are for the establishment of a social protection floor providing access to basic social security provisions for all. With such their survival and the sustainability of their livelihoods. a system existing social security schemes will become Farmers, fishermen and plantation workers are concerned additional pillars offering higher levels of protection to about the day to day challenges facing their sectors. It is of vulnerable groups of the population. little use talking about retirement benefits when they are struggling to survive in harsh conditions. When their Peoples trust in the Governments promise to ensure social livelihoods and even their way of life is at risk, mere protection and administer the schemes has diminished. provisions of social security will not address their Further, such provision of benefits are seen as populist problems in a substantial way. While ensuring workers are measures by governments to broaden their voter base and protected to face short-term contingencies, a win over workers loyalties. Pension schemes are often comprehensive approach must include public investments appropriated to be charity pay-outs as opposed to being a to both ensure social welfare of these communities and workers right. Disgruntled workers prefer the Government to invest in and support their efforts to earn sustainable growth of these sectors. higher incomes than rely on schemes exploited by politicians to gain patronage. Sustaining Social Security Schemes In recent times, the public provisioning of social security Old age social protection is of current importance to Sri itself has come under threat. There is a new push globally Lanka as we are one of the fastest ageing societies in the to privatize social security schemes encouraging world. It is expected that 20% of the population will be over governments to create privately managed funds with the age of 60 by 203023. The average life expectancy of a Sri purely contributory mechanisms that does not require Lankan is 75 years today. Increasing life expectancy, slow investments from state budgets. The pressure to expose growth of real employment incomes and rising cost of publicly managed social security funds to high risk living have already begun to pose significant challenges in investments has increased. Also, the push towards addition to the ageing workforce. An elderly group who are privatising social security comes with an attempt to further dependent for their survival on their children and relatives narrow the definitions of social security making such only augments the future challenges facing workforce benefits eligible to a smaller group of people. participation and the burden of care. Old age dependency This trend towards privatization of social security ratio is 21% today and is expected to increase to 29% by provisions poses a threat to the workers right to social 2030. security. The ILO has provided principles that specify state Given that there is a probability of a crisis similar to the responsibility for the provisioning of benefits and proper Farmers pensions befalling other retirement schemes in functioning of social security schemes, collective financing the near future, there is a need to review the entire social of benefits through contributions and taxation and security framework. The fragmented nature of social solidarity and pooling of risks26. However, other agencies security provisioning and the lack of a comprehensive like the World Bank promote multi pillar systems which overall strategy, has led to weak schemes that fall short of includes the agenda of privatization of social security27. The World Banks strategic approach to social security is offering a minimum level of protection for all persons. restricted to social risk management. The push is towards The responsibility of developing and managing social introducing micro-insurance and loans, than focusing on security provisions have been allocated to various adequate income benefits. ministries, departments or public agencies within the government. This has resulted in the disintegration of Social security is linked to workforce participation in the existing social security schemes, increasing overall costs of market. It focuses on individual wage earners and excludes administration of the schemes and lack of comprehensive those who are not engaged in active employment or strategy for extending and sustaining these schemes. The contributions of those offering care labour within compartmentalization of social security schemes into households. Given the contributory nature of existing various sectors has also resulted in a lack of vision for schemes they target those who are in a position to save for universal social protection and establishment of basic protection for all. A universal pension scheme has been
Department of Census and Statistics International, 2008, Tackling poverty in old age: a universal pension for Sri Lanka
23 24HelpAge 25Secretariat

for Senior Ministers, Dec 2012, The National Human Resources and Employment Policy for Sri Lanka 26 ILO Convention 102 on Social Security 27 World Bank, 2012 -2022 Social Protection and Labour Strategy
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the long term28. Thus, they exclude sections of society who the Governments economic policies are in line with large have irregular incomes below the capacity to save from infrastructure projects and urbanisation. accessing basic social protection for themselves. This is a Government Expenditure (% of total public investments)31 limitation of introducing purely voluntary and selfcontributory funds. Women workers in particular are affected when their contributions are not recognized as they make up a larger proportion of informal sector and care labour workers. Women make up 70.3% of the economically inactive population in Sri Lanka, and 57.1% of them are engaged in housework29. They are effectively left out of enjoying basic social security provisions. For women employed in agriculture and fisheries sectors, though existing pension schemes extend coverage to female workers, they still struggle to gain recognition within their sectors for their economic contributions to farming and fish production processes. Some women have subscribed to the farmers and fishermens schemes and are the chief motivators encouraging their spouses to contribute. Large groups of women employed in plantation sectors and women in the rural sector bear the burden of saving for the family. This trend has been exploited by agencies offering microThe impact of reduction in social welfare spending has finance and self-employment loans. eroded the wellbeing of communities, particularly those The unequal spread of existing social security schemes for dependent on rural economies and workers living in poor different sectors create inequalities, advantaging some economic conditions. groups over others. Some contingencies are covered on a Government Expenditure on key welfare programmes universal basis and others under specific schemes (old age, 2012 (Rs. Mn)32 disability, survivors benefit). Some contingencies are provided only with partial coverage (disability, maternity, workmens compensation) and others dont receive any coverage at all (unemployment). Public sector employment has been highly preferred in Sri Lanka solely due to the availability of pension benefits after retirement. Government expenditure for public sector pensions in 2012 amounted to 1.5 % of GDP. Social security schemes are structured around providing benefits to individual workers and may sometimes extend benefits to their families. The underlying assumption here is that providing protection for individual workers is sufficient to enable communities to cope. This approach is in sharp contrast to public spending on social welfare which had a long-term vision and focus on broader societal development. Sri Lanka has been credited in the past for having adopted progressive welfare policies which have led to higher quality of life and better development. In the last few decades state funding for education and health services have declined. The government budget reflects the policy priorities of the state. While several initiatives30 have been proposed to address the needs of the rural population, a closer look at budgetary allocations reveal that the focus of

ILO, 2008, Social Security in Sri Lanka Annual Report, 2012, Labour Force Survey 30 Programmes like Gama Neguma, Api Wavamu Rata Nagamu in the Mahinda Chinthana target rural communities
28 29

31Ministry 32

of Finance and Planning, Annual Report 2012 Ministry of Finance and Planning, Annual Report 2012

The push towards reducing state spending on social welfare comes with, international agencies claiming that social security provisions are widely available for workers to be able to face risks associated with their professions, volatile labour market conditions or loss of income due to other contingencies. However, while there is a multiplicity of schemes to workers, they are narrowly defined and cannot compensate for the reduction of public provisioning of social welfare to communities. In addition to the limitations of narrowly defined social security schemes, the global financial crisis, recent hikes in fuel costs, recurrent natural disasters and changing labour practices are devastating communities. Strong social security provisions are crucial to prevent people from becoming destitute and to prevent them from plunging into conditions of poverty. Therefore, it is important to ensure that benefits through existing schemes reach eligible groups and are further expanded to include excluded sections of society. Furthermore, a reversal of the governments economic policy direction is necessary with higher spending on social welfare to achieve long-term development and social wellbeing. Conclusion There was widespread expectation that the government will resolve the problems facing the Farmers Pension Scheme with the 2014 budget. The government has announced introducing a scheme for the farmers from January 2014 with Rs. 1 250 as minimum monthly pension payments, while raising the pensionable age to 6333. It has proposed a capital contribution of Rs. 1 Billion from the government to strengthen the fund. Efforts to ensure those who have contributed to the fund receive their due benefits is welcome. However, the measure of increasing the age for pension entitlement and transferring money to meet the present need alone will not suffice. Furthermore, there is a larger crisis waiting to happen in other pensions and provident funds. For the government to effectively tackle this issue a change in social security policy is needed.

security to be effective a society-wide approach is necessary by expanding other essential services such as free health to the elderly and universal pensions. Demographic changes in Sri Lanka with an ageing population require special attention towards old age benefits and protection. An expansion of benefits and stronger retirement security provisions are necessary to meet the future challenges posed by these demographic changes. A critical examination of the impact of narrowly defined social security measures leading to social exclusion is also important now. In this regard moving towards a universal pension scheme will ensure basic protection is available for all. For social security to be effective the state must first address the volatile situations and risks faced by farmers and fisher folk, providing them with support for the growth of their sectors, alternate income safety nets and insurance provisions. Any kind of social security programme becomes meaningful only if each sector receives enough employment support and investments for its own sustainability. Furthermore, it calls for a shift in the policy trajectory of the government and investment priorities. Demands for Social Security benefits and greater public investment in social welfare were sustained by labour movements and peoples struggles in the foregone decades. However, social welfare in recent decades has been undermined by state policies and development agendas fuelled by market ideologies and personal interests. More recently, the Governments attempt to introduce a pension scheme for private sector workers in 2011, resulted in decisive protests by workers against a pension bill that did not address the workers concerns. The protestors were not only concerned about the viability of the scheme they were getting and their rights to pension provisions, but that peoples perspectives should be considered in Governments economic policy making. Such struggles both in Sri Lanka and globally points to the democratic demand for universal social security schemes, robust social welfare and participation of the workers in the formulation of social and economic policies.

Social security provisions that are currently in place do not adequately address the contingencies faced by informal workers in Sri Lanka. A voluntary and purely contributory Researched and written by Niyanthini Kadirgamar pension scheme is effective only when employees are enjoying continuous and sustainable incomes. Furthermore, pension benefits are mainly utilized to cover the medical expenses of ageing workers. In order for social

Published by the Law & Society Trust for the Active Citizenship for Development Network, with the support of CAFOD

33Budget

Speech 2014, made in parliament on 21st Nov 2013

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