Deputy Governor Yvette Fernando announced that Sri Lanka’s Employment Provident Fund (EPF) contributions returned to a positive trend in 2024, reversing the previous year’s outflows that exceeded inflows. Fernando attributed the 2023 outflows partly to delayed fund withdrawals by retirees, resulting in a higher net outflow. However, in 2024, contributions have rebounded, indicating a positive balance.
The positive shift in EPF contributions coincides with several private firms increasing salaries in response to a spike in inflation observed in the previous year. Additionally, some companies raised executive salaries to offset the impact of an income tax hike. These adjustments likely contributed to the improved contributions to the EPF in 2024.
Despite concerns raised by demographers over the years regarding the sustainability of EPF contributions, the program’s reversal to positive contributions in 2024 suggests a temporary reprieve. While the original deadline for negative contributions had passed, the recent positive trend underscores the resilience of the EPF system amidst economic fluctuations and policy changes.