Sri Lanka
Sri Lanka: Pension system in 2016.
Employees in the formal private sector are covered by defined contribution plans: Employees Provident Fund, which is used in the model, Employees Trust Fund or approved private sector provident fund. Civil servants were formally covered by public sector pension scheme.
Qualifying conditions
At age 55 for men and 50 for women.
Benefit calculation
Defined contribution
Employee’s provident fund is a fully funded defined-contribution plan and employees contribute 8% of wage and employers pay 12%. The entire lump sum, including interest, is paid at the time of exit. The annual interest rate must be at least 2.5%. For comparison with other economies, for replacement rate purposes the pension is shown as a price-indexed annuity based on sex-specific mortality rates.
Variant careers
Early retirement
At any age if the government closes the place of employment, if emigrating permanently, or for employed women who marry.
Late retirement
It is not possible to start claiming pension after the normal pension age.
Personal income tax and social security contributions
Taxation of workers
There is no income tax relief and the deduction of work-related expenses.
Taxation of worker’s income
Social security contributions payable by workers
Employees’ contributions are deductible up to a limit of LKR 25 000 per annum.
Taxation of pensioners
All purchased annuities of retirees are exempt.
Taxation of pension income
Social security contributions payable by pensioners
Pensioners do not pay any social security contributions.