Employees' Provident Fund

The Employees’ Provident Fund (EPF) was established under the EPF Act No.15 of 1958 (Act) as a mandatory defined contribution retirement scheme for the private and semi-government sector employees who do not enjoy pension benefits. Being the largest superannuation fund in Sri Lanka, EPF manages an asset base of Rs. 3,460 bn as at end 2022.

In terms of the provisions of the Act, the Commissioner of Labour acts as the general administrator of the Fund while the Central Bank of Sri Lanka (CBSL) is entrusted with the powers, duties and responsibilities to act as the custodian of the Fund. The EPF Department of CBSL facilitates the Monetary Board in discharging its powers, duties and functions entrusted by the Act.

The mandatory minimum contribution rate for the members of the Fund at present is 20 per cent of the gross monthly earnings of their employment. The employers and the employees (members) are required to contribute minimum rate of 12 per cent and 8 per cent of the member’s monthly gross earnings, respectively to EPF. Member’s EPF balance keeps growing as member mature at their working environment as the cumulative balance in their EPF account, which is maintained by the Central Bank, and is invested in Treasury Bills, Treasury Bonds, Equity and Corporate Debentures etc. Depending on the rate of return, an annual interest rate is declared and credited to member’s account.

The EPF members are eligible to claim their retirement benefits (contributions and accumulated interest) upon reaching the retirement age of 50 years for females and 55 years for males. In addition, members are also entitled to withdraw funds in their EPF accounts in the events of migration, permanent disability, leaving the employment due to marriage (only for female members) and joining a pensionable employment. Further, legal heirs of deceased members are eligible to receive the benefits in the case of the death of a member.

In addition to the retirement benefits, EPF facilitates members to obtain loans for housing purposes from five approved lending institutions by pledging the balances lying to the credit of their member accounts with EPF. Further, as provided in the EPF (amendment) Act, No.02 of 2012, members who have service of more than 10 years and EPF account balance of more than Rs.300,000 are entitled to withdraw up to 30 per cent of the amount (Maximum of Rs. 2,000,000) lying to the credit in their member accounts with EPF for the purpose of house construction or medical treatment with effect from 2015.