Nearly half of Sri Lanka pensions benefit top 20-pct income group
- 5opn1
- December 27, 2024
- Political
- Nearly half of Sri Lanka pensions benefit top 20-pct income group
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The non-contributory nature of Sri Lanka’s Public Services Pensions (PSP) scheme has become a significant burden on the country, as pension benefits are funded directly from government revenue through general taxation, a research article by the Institute of Policy Studies finds.
“With approximately 700,000 public sector pensioners, this system imposes a substantial financial strain on the government.”According to IPS, about half of these pensions benefit the top 20% income group.
The think tank recommends a gradual transition to a contributory scheme, and structural reforms.Public sector pensions are fully funded through tax revenue, consuming 12% of government income.
This imposes a heavy strain on resources, since public service pensions are largely not progressive in nature.According to the Institute of Policy Studies of Sri Lanka (IPS), about half of these pensions benefit the top 20% income group.
