Social security and welfare fund, valued at US$14.63 billion, is in precarious position, says labour activist

Lankan trade unions and labour activists have urged workers to unite and prevent the government’s attempt to undermine the nation’s largest social security and welfare fund amid concerns over economic hardships due to the island nation’s debt crisis, UCAN has reported.

Anton Marcus, joint secretary of Sri Lanka’s Free Trade Zones and General Services Employees Union, said the fund, representing nearly 2.5 million people and valued at 4.9 trillion rupees (US$14.63 billion), is in a precarious position, according the UCAN report.

“There have been several attempts to misuse or take control of this fund under various pretexts, and the latest Cabinet decision has caused concern and unrest among private and semi-public sector employees,” Marcus, a Catholic, said in a press conference on Aug. 4.

The left-wing National People’s Power (NPP) government of President Anura Kumara Dissanayake defended the Cabinet’s decision.

Deputy Labour Minister Mahinda Jayasinghe told parliament on July 24 that the government aims to improve efficiency and member benefits of the Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF), and has undertaken a study, the first in decades.

But Media reports said the Cabinet has already approved amendments to the EPF Act of 1958, amid growing concerns among its members about changing social, economic and technological conditions in employment.

Marcus alleged that the labour ministry had submitted the tripartite proposal to the Cabinet without informing the National Labour Advisory Council, the primary tripartite consultative body for cooperation between the government, worker organizations, and employer federations on national labor policies and international labor standards.

The workers remain wary, recalling past attempts by successive governments to misuse the fund, he said.

Marcus recalled the Rajapaksa government’s 2011 attempt to interfere with the fund under the guise of introducing pensions for private-sector workers had prompted trade unions and workers to launch a nationwide protest campaign.

“Workers from the Katunayake Free Trade Zone joined unions in a massive protest, forcing the Cabinet to withdraw the proposal, but police opened fire on the protesters, resulting in the tragic death of young worker Roshen Chanaka and leaving nearly 100 workers injured,” he said.

The island nation’s economic crisis, since the first-ever sovereign debt default in April 2022, has caused heavy reliance on international borrowing. This led to critical shortages of food, fuel, and medicine, alongside massive public protests.

As of early 2026, Sri Lanka’s central government gross public debt stands at $98.97 billion, including $37.47 billion in external debt, as the country restructures debt under its $2.9 billion IMF program.

The EPF and ETF provide workers financial security through retirement savings, housing and medical withdrawals, welfare benefits, migration, disability and marriage-related assistance, plus support for major surgeries, hospitalisation, death and workplace injuries.

Nissanka Sadun, a Christian working as a manager at Katunayake Free Trade Zone, said the latest Cabinet decision has left employees worried about protecting their savings and retirement security.

“The comrades who protested with us against the previous government’s attempts to misuse workers’ security funds are now ministers, but their government is trying to misuse the same fund differently,” Sadun told UCA News on Aug. 5.

Sarojani Pathirana, 52, who has worked at a private company in Wattala for 28 years, said her EPF and ETF savings are her family’s only financial security, like several thousand other families.

“Workers depend on EPF savings for housing loans, medical emergencies and partial withdrawals before retirement,” Pathirana, a Buddhist, told UCA News.

The EPF and ETF are mandatory social security schemes, with EPF contributions coming from employees and employers, while ETF is funded entirely by employers.