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SLCTB
employees cry foul
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By
Frederica Jansz
Even
as the government continues with plans to fully privatise
the Sri Lanka Central Transport Board (SLCTB) some 3,500
employees are crying foul, charging the management with
having vested interests in managing the Employees Provident
Fund (EPF). |
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The
Employees Provident Fund (EPF) of the SLCTB is a privately managed
fund. This means it is independent of the EPF managed jointly by
the Labour Department and the Central Bank.
The
SLCTB provident fund is managed by a committee consisting of
officials and member representatives. The member representatives
are invariably trade union officials of the unions affiliated by
the party in power. The fund is managed by an appointed manager
and treasurer.
With
the creation of 93 independent peoplised bus companies in 1990,
some 35,000 employees who were attached to the 93 bus depots ear
marked for peoplisation were paid their full provident fund dues
and thus ceased to be members of the fund.
Membership
reduced
This
resulted in the membership being reduced to around 5000 at the
time. Currently, it stands at around 3,500.
The
position of the fund and its assets stood at Rs. 5.6 billion as at
June 30, this year. These monies have been invested in Treasury
bills, Treasury bonds, short-term Treasury bills and Rs. 1.5
billion used for government loans. The average interest received
on all these investments is less than 10% per annum.
The
government is to soon introduce a compulsory retirement scheme for
the nearly 3,500 employees of the SLCTB. As a result, a projection
has been made by the fund management to ascertain the total amount
required to pay the provident fund dues to all employees.
The
projection maintains that an average EPF payment for a single
employee stands at Rs. 377,331.75. The amount required to pay 3500
employees has been placed at Rs. 3,070 million. An average payment
for a single employee after deducting loans taken is at Rs.
401,130. The total amount required to pay 3,500 employees is
estimated at Rs. 1,666 million.
Officials
pointed out that this means there will be a balance of nearly Rs.
3 billion when the SLCTB is closed. Employees emphasised that the
financial assets of the SLCTB provident fund were accumulated over
the years and each and every employee who served in this
organisation from 1958 contributed to the accumulation of the vast
cash balance.
Angry
employees are charging that it now appears the provident fund
management committee chaired by the Chairman, SLCTB is using
various dubious methods to enhance the payments due to the
remaining 3,500 employees, at the expense of the fund.
Dwindling
financial assets
Employees
point out that they are being paid an annual interest exceeding
20%. This means the financial assets of the fund which is averaged
at less than 10% per annum will dwindle rapidly. They maintain
that this is also being done at a time when the prevailing bank
interest rates are less than eight percent and the government EPF
pays only 10% interest.
The
allegation being made is that the management of the SLCTB while
distributing largesse to all employees have failed to realise that
the financial assets of the funds are in this strong position due
to money advanced by the Treasury, contributions made by 60,000
odd employees over the years and also due to funds belonging to
more than 10,000 employees who are yet to make their claims.
Employees
point out that the sum of Rs. 4.5 billion is too big an amount to
be left in the hands of a few persons with vested interests. If
the current interest payments continue, they said, the assets of
the fund would be in jeopardy.
They
reiterate that there is no doubt this fund is being badly managed
and are calling on the Treasury, the Labour Department and the
Central Bank to conduct an inquiry.
With
regard to this fund a problem also arose somewhere in 1980 when 13
regional boards that existed at the time failed to remit the
employees and employers contribution to the fund though deductions
were made from salaries of the employees.
It
was revealed that these funds were used by the regional boards for
other purposes. As corrective steps were not taken, despite
repeated reminders, the Labour Department took legal action
against the SLCTB on behalf of the employees.
Remanded
As
a result the chief accountant at the time was remanded for failure
to make the legally required remittances. The Treasury was
compelled to settle the arrears amounting to Rs. 1 billion, which
amount in turn was invested in Treasury bonds by the provident
fund at approximately nine percent annual interest.
The
employees reiterate that considering the vast amount of excess
cash the fund has to its credit, the Treasury has an obligation to
reclaim this sum of Rs. 1 billion from the fund.
Chairman,
SLCTB, U.L.M Farook was unavailable for comment.
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