📈 EPF Reform Proposal: EFC vs State Custody

A critical debate has emerged over the governance of Sri Lanka’s multi-trillion-rupee Employees’ Provident Fund (EPF), which accounts for over 15% of the national GDP. • The Corporate Proposal: The Employers’ Federation of Ceylon (EFC) has submitted proposals to remove EPF management from the Central Bank of Sri Lanka (CBSL) and transfer it to an independent, tripartite trustee board (employers, employees, and Government), while aggressively expanding investments into the private sector. The Government has approved a committee to study this feasibility. • The Critique: Analysts warn the plan acts as a "Trojan Horse" masking corporate capture. Because the EPF is a legally mandated, closed-loop retirement scheme, a private-led board would operate without market competition or capital flight risks, creating severe moral hazard and risks of "front-running" (insider trading using asymmetric market information). • Alternative Public Solution: Critics argue true reform requires fixing the principal-agent problem by legally merging the exclusive CBSL Staff Provident Fund into the general public EPF. This would force regulators to have "skin in the game" and protect worker yields against both political manipulation and private exploitation, keeping the multi-trillion-rupee fund under transparent State custody.