Sri Lanka’s Employees’ Provident Fund (EPF), the country’s largest financial institution, has lower disclosure standards than listed companies, licensed commercial banks and unit trusts, according to a new research brief by Colombo-based think tank Verité Research.
The brief — “The Employees’ Provident Fund in Sri Lanka: A Comparative Assessment of the Adequacy of Information Disclosure,” published Monday — found the EPF “discloses less information, in less detail, less often, and with less timeliness than these other entities, which also hold pools of public savings.” Verité said this indicates the Central Bank of Sri Lanka (CBSL), as the fund’s manager, applies lower transparency standards to the EPF than it requires of the financial entities it regulates.
The fund also falls short of international benchmarks for disclosure, including the OECD-linked IOPS pension-supervisor principles and the Global Pension Transparency Benchmark, the think tank said.
Verité argued the gap is critical because of EPF members’ unique position: private-sector workers are required by law to contribute, play no role in managing the fund and cannot withdraw their savings at will. “Adhering to global standards of transparency is the only safeguard members have,” it said, noting concerns are heightened by past malpractice exposed in forensic audits published in 2019.
The brief lands as scrutiny of CBSL’s dual role intensifies. Parliamentarian Ravi Karunanayake has pointed out that the Rs. 13.2 billion fraud at National Development Bank — and the bank’s decision to withhold a dividend — hit the EPF directly, since the fund holds roughly 9.46% to 9.50% of NDB’s equity, while the same central bank both manages the EPF and supervises NDB.
Verité recommended three near-term reforms: full compliance with the EPF Act, adoption of international best practice, and passage of a 2024 private member’s bill on EPF disclosure, alongside more robust longer-term regulation of the fund.
