8 May 2024 12:21 am Views - 307
The Central Bank yesterday attributed the negative Employees' Provident Fund (EPF) net contribution witnessed last year to the public skepticism about the economy’s trajectory.
Data from the Central Bank showed that in 2023 the EPF net contribution recorded a negative value of Rs. 5.3 billion, which is a 116 percent contraction from the Rs. 31 .6 billion recorded in 2022.
“We observed an increased number of withdrawals which may have been due to the uncertainty people had over the economy,” Central Bank Senior Deputy Governor T. M. J. Y. P. Fernando told journalists yesterday while responding
to a question.
Over the last five years, EPF net contributions stood between Rs. 30-40 billion, and recorded an excess value over refunds.
According to Fernando, there have been instances where people who have reached their retirement age did not withdraw the fund to gain the interest.
“...but probably considering economic difficulties and uncertainties that members had, there were increased requests for fund withdrawals. That is what we feel about last
year’s behavior.
“But this year we are seeing normalcy on a monthly basis; we have gone back to earlier stages of net contributions with excess contributions over refunds,”
she said.
In 2023, the EPF saw contributions grow by 8.2 percent from the previous year to US$ 210.6 billion. However, refunds expanded by 32.4 percent to Rs. 215.9 billion when compared to 2022. The value of the EPF grew by 11.5 percent to Rs. 3, 857 billion in 2023.