This publication provides an assessment of the Employees’ Provident Fund (EPF) in Sri Lanka. The EPF is by far the largest such fund in Sri Lanka which was established in1958, around the same time that similar provident funds were established in Singapore and Malaysia, then still under British colonial rule. Since 1958, the EPF has operated relatively smoothly under Central Bank supervision. It now controls the largest stock of savings in the country, and plays a major role in public policy, not only as a potential source of retirement income for its beneficiaries, but also as the major financier of the government structural fiscal deficit. This publication provides a detailed background of the EPF, starting from the establishment till now. It discussed the motivations and rationale for establishing the EPF in Sri Lanka, the roll and the experiences of policy makers regarding this issue, how the EPF was designed and adopted, major difficulties faced, etc… It also shows that in recent years, both the actual and perceived shortcomings of the EPF system have attracted much debate and that many of the most frequently alleged shortcomings and deficiencies are misplaced, and some of the most substantial deficiencies have been overlooked. Nevertheless, the relative success of the EPF can and should be built on to further improve its benefits for its current beneficiaries and to extend those to a larger cross-section of the workforce.

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