Income Security for Older Persons in Sri Lanka
Ganga Tilakaratna
Symposium on 'Old-Age Income Security and Universal Basic Income in South Asia' organized by the UNESCAP held in New Delhi, India, 27 February 2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%19
81
2001
2006
2011
2016
2021
2026
2031
2036
2041
2046
2051
2056
2061
2066
2071
Elderly (60 &above)
Working Age(15-59 Years)
Children (<15Years)
24.8% (2041)
12.5% (2011)
Source: Based on De Silva (2012): ‘The Age Structure Transition and the Demographic Dividend’
Ageing Population in Sri Lanka
0
20
40
60
80
100
120
140
1971
1981
2001
2011
2021
2031
2041
2051
2061
2071
Gen
der
Ratio
(num
ber o
f m
ales
per
100
fem
ales
)
75+
All 60+
Source: De Silva (2012)
Gender Ratio of the Elderly Population
A higher proportion of females in the 60+ age group. Proportion of females is even higher in 75+ age group
Income Security Schemes for Older Persons In
com
e S
ecur
ity S
chem
es
Retirement Benefit Schemes for Formal Sector
Public Servants’ Pensions
EPF
Pension Schemes for Informal Sector
Farmers' Pension
Fishermen’s pension
Self-employed pension
Cash Transfers for Low- Income Elderly
Elderly Assistance
PAMA, Samurdhi
Retirement Benefit Schemes for Formal Sector Workers
Public Servants Pension Scheme (PSPS) - since 1901
Non- contributory scheme for all permanent employees in the public sector
Widows, Widowers & Orphans Pension Scheme (W&OP)
Public Servants Provident Fund
Contributory scheme for public servants not eligible for the PSPS
Employee’s Provident
Fund (EPF)- since 1958 Contributory scheme for
formal Pvt. sector employees
Lump-sum benefits
Pension Schemes for Informal Sector Workers
Farmers Pension Scheme (in 1987)
- Contributions : every 6 months or as a lump sum
- Pension amount depends on the age of joining scheme
Fishermen’s Pension Scheme (in 1990) - Contributions : every 3 months or as a lump sum - Pension amount depends on the age of joining scheme
Pension for Self- employed Workers (in 1996) - Benefits and contributions are higher than other 2 schemes - Policy holder can choose the expected pension & design policy
Voluntary and Contributory schemes Benefits: Monthly pension at 60, survivor benefits and disablement
and death gratuity
Cash Transfers for Low-Income Elderly
Elderly Assistance Program Monthly cash grant of Rs 2000 to elders
aged 70+ years, without any other income
PAMA - Public Assistance Monthly Allowance Implemented by Provincial Councils Monthly cash grant of Rs 250+
Samurdhi Cash transfer Monthly cash grant to low income
families (Rs 750 +)
Coverage of Income Security Schemes for Elderly
UNESCAP (2015); Tilakaratna & Jayawardena (2014)
Adequacy of Benefits?
16,675 16,814
1499 1000 1000 2000 250 750
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Am
ount
in S
LRs
Poverty line : ~ SLRs 3781 (Dec 2013)
Source: Based on UNESCAP (2015)
Benefits under these schemes are not indexed to inflation
A Fragmented System….
National Secretariat for
Elders –( Elders Assistance)
EPF Dept. (EPF)
Dept. of Pensions –
(PSPS)
AAIB- (farmers and fishermen’s
pension) Social Security
Board - (Self employed
pension )
Provincial Councils- (PAMA )
Divineguma Dept. –
(Samurdhi)
Sustainability of Schemes
The cost of the non- contributory PSPS is high, although it covers less than 20% of elderly
Given the increasing number of pensioners and rising costs,
sustainability of the non-contributory scheme is a challenge. Sustainability of the contributory informal sector pension schemes is an
issue – low and irregular contributions, inactive membership, inadequate government funding, etc.
1.4% of GDP (in 2015)
45% of transfers to HHs
(in 2015)
Expenditure doubled during
2009-2015
Conclusions and Recommendations
The current social security system has failed to provide adequate income security for a large share of elderly.
The weaknesses of informal sector pensions have indicated the difficulty of sustaining contributory schemes for informal workers.
Need for reforms to expand coverage and provide adequate income for all elderly.
Introduce a (universal) social pension scheme.
Reforming the PSPS : introducing a contributory scheme for public servants.
Thank you