EPF lags behind listed companies and banks on transparency: Verité Research

The Employees’ Provident Fund (EPF), despite being Sri Lanka’s largest financial institution, has lower transparency and disclosure standards compared to other entities that manage funds on behalf of third parties, such as companies listed on the Colombo Stock Exchange, licensed commercial banks, and unit trusts.This was revealed in a new research brief by Verité Research titled ‘The Employees Provident Fund in Sri Lanka: A Comparative Assessment of the Adequacy of Information Disclosure’ published yesterday. 

The brief found that the EPF discloses less information, in less detail, less often, and with less timeliness than these other entities, which also hold pools of public savings. This suggests that the Central Bank of Sri Lanka (CBSL), as the manager of the EPF, applies lower transparency standards to the EPF than is applied to other financial entities that are regulated. 

The EPF also falls short of the international benchmarks for timely, detailed, and accessible public disclosure of fund information as specified in the ‘OECD’s International Organisation of Pension Supervisors (IOPS) principles’ and the ‘Global Pension Transparency Benchmark (GPTB)’.These shortcomings are critical due to the unique position of the EPF members. Private-sector workers are mandated by law to contribute to the EPF, play no role in the fund’s management, and cannot withdraw their savings at will. Consequently, adhering to global standards of transparency is the only safeguard members have to ensure their future welfare is protected. 

This concern is further heightened by the EPF’s past exposure to financial malpractice, as revealed in the forensic audits published in 2019.