EPF member returns drop to 9.25% in 2019
By Ishara Gamage
Sri Lanka's largest private sector retirement fund, the Employees' Provident Fund (EPF) has declared an interest rate of 9.25 per cent on member balances in 2019 after transferring Rs 7.7 billion to the Profit Equalisation Reserve, the Central Bank of Sri Lanka (CBSL), the fund's custodian, stated in its latest annual report.
The fund had declared an interest rate of 9.5 per cent on member balances in 2018.
Meanwhile, the total value of the Fund increased by Rs 251.1 billion to Rs 2,540.4 billion at end-2019, from Rs. 2,289.4 billion recorded by end-2018, recording an 11.0 per cent growth.
According to the CBSL, this increase was due to the combined effect of the net contributions of the members (contributions less refund payments), and the income generated through investments of the Fund.
The total investment portfolio (book value) of the Fund grew by 10.9 per cent to Rs. 2,548.7 billion as at the end of 2019, from Rs. 2,298.8 billion at the end of 2018.
Accordingly, at the end of 2019, the investment portfolio consisted of 93.8 per cent in Government Securities, 3.0 per cent in equity, 1.7 per cent in corporate debentures and trust certificates, 0.9 per cent in fixed deposits, and the remaining 0.6 per cent in Reverse Repurchase agreement.
Total liability to the members stood at Rs 2,497.6 billion at end-2019, recording a 10.8 per cent increase from Rs 2,254.2 billion at end-2018.
The total contribution for 2019 increased by 8.4 per cent to Rs 157.2 billion, while the total amount of refunds made to the members and their legal heirs in 2019 was Rs 126.3 billion, which was an increase of 17.0 per cent over 2018.
Accordingly, the net contribution was Rs 30.9 billion, compared to Rs. 37.0 billion recorded in the previous year.
The annual profit of the Fund increased by 16.9 per cent to Rs. 222.8 billion in 2019, from Rs. 190.6 billion from the previous year.