The use of the term pension is not regulated in the island, said Nishan de Mel, Executive Director and Head of Research at Verité Research, a think-tank.
“It can be called a pension only if it offers payment till death,” he told the National Pensioners Day Symposium organised by the Department of Pensions. “Most schemes offer only payments for a limited period of time,” he added. “Today most schemes offer long term savings and only last till you are 70 years.”
The country is facing a retirement crisis with a huge pension liability for a bloated public service that’s not properly funded and the majority of the workforce not covered by any pension scheme.
Sri Lanka has one of the fastest aging populations in the region with the number of elderly people expected to almost double within 20 years.
Several financial institutions have started offering contributory pension schemes but many are for limiter periods of time.
Policymakers are considering raising the retirement age as people are living longer and need the support of pensions for a longer period after they retire. (Economy Next)