Cabinet approves committee to study merging EPF and ETF under unified tripartite governance

The Cabinet has approved the appointment of a Senior Officials Committee to study the feasibility of bringing the operations of the Employees’ Provident Fund and the Employees’ Trust Fund under a single tripartite governance framework, in a move that would mark the largest structural reform to Sri Lanka’s workplace retirement system in decades.

The Committee will examine how the two largest contributory funds in the country — together covering more than 5.5 million members and overseeing assets worth in excess of Rs. 5.5 trillion — could be integrated under a unified board representing the Government, employers and employees, Newswire reported. The proposal was tabled by the Labour Minister.

The Employees’ Provident Fund, established in 1958, covers more than 2.5 million members and holds assets exceeding Rs. 4.9 trillion at end-2025 per the Central Bank’s most recent annual review. Its custodianship, investment management, financial administration and benefit payments are currently overseen by the Central Bank of Sri Lanka, while the Department of Labour handles registration, compliance, arrears recovery and legal protection of employees’ rights.

The Employees’ Trust Fund, set up in 1980, is managed by a tripartite board representing employers and employees and currently covers over 3 million active members with assets exceeding Rs. 637.5 billion. The Cabinet briefing said the tripartite model is recognised internationally as best practice and is promoted by the International Labour Organization.

Any merger would have significant implications for fund members and the financial sector. The EPF in particular is one of the largest investors on the Colombo Stock Exchange and a major holder of government securities, while transparency concerns around its disclosures have been raised by civil society researchers earlier this year. The Cabinet decision is limited to authorising a study at this stage and does not yet commit to a merger.

The committee’s terms of reference, membership and reporting timeline were not disclosed in Tuesday’s briefing.