Government accused of plotting to seize workers’ retirement funds through EPF-ETF merger

by Subhashi Tania de Silva

A media briefing was held in Nugegoda on 24 June 2026, where concerns were raised over the Government’s proposal to merge Sri Lanka’s two largest private-sector retirement funds , the Employees’ Provident Fund (EPF) and the Employees’ Trust Fund (ETF).

Addressing the media, Duminda Nagamuwa, General Secretary of the Frontline Socialist Party, alleged that the move was not a reform designed to benefit workers, but rather an attempt to undermine and ultimately weaken workers’ retirement savings.

Nagamuwa noted that the Cabinet had approved the proposal on 15 June. While the initiative had been presented as a measure to improve retirement benefits, he argued that its true purpose was to facilitate greater control over workers’ savings while reducing the protections currently afforded to them.

He recalled previous attempts by the Rajapaksa administration to introduce similar reforms, claiming that strong opposition from workers and trade unions had prevented their implementation. He referred to the protests that erupted during that period, including the death of worker Roshen Chanaka, as evidence of the resistance such measures had historically faced.

According to Nagamuwa, the EPF and ETF were established for distinct purposes and operate under different structural frameworks. Merging them, he argued, would dilute those objectives and deprive employees of benefits specifically attached to each fund.

He further criticised proposals to place the merged fund under a new governance structure involving representatives of employers alongside the Government and workers. Questioning the rationale behind such a move, he alleged that it would grant powerful business interests greater influence over funds that belong to employees.

“This is equivalent to handing the henhouse over to the foxes,” he said.

Nagamuwa warned that wealthy corporate figures could gain significant influence over investment decisions if the proposal proceeds. He claimed that the long-term objective was to redirect retirement savings towards ventures that primarily benefit major investors and large corporations.

He also expressed concern that a reduction in government borrowing from the EPF and ETF would create opportunities for private financial institutions to profit from lending to the state. In addition, he alleged that the Government intended to increase investments from the funds into the stock market, a move he argued would disproportionately benefit large shareholders and business elites.

The Frontline Socialist Party further claimed that workers’ retirement savings had already suffered substantial losses under economic reforms linked to the International Monetary Fund (IMF). Nagamuwa stated that the real value of workers’ retirement funds had declined significantly and warned that further reductions in interest rates could erode savings even more.

He accused the Government of betraying the interests of the working class and called upon trade unions and labour organisations to oppose the proposed reforms.

“The Government must immediately withdraw this proposal and abandon IMF policies that continue to weaken the EPF and ETF,” he said.

Nagamuwa concluded by warning that, should the proposals move forward, workers and trade unions would be prepared to launch a sustained campaign of industrial and political resistance.