By Chula Goonasekera –

The current debate over pensions for legislators has captured public attention, and Parliament has already taken steps to address the issue. Yet this moment calls for a perspective broader than narrow political argument. Pensions are not merely a privilege granted to a few—they are a fundamental national responsibility.

In any democratic and compassionate nation, pensions represent a social contract. Public funds are generated through the hard work and productivity of citizens during their working years. Society thus has a collective obligation to ensure that those who contribute to national development are not abandoned in retirement. This is not charity; it is justice.

A sustainable and equitable pension system should rest on two clearly defined pillars: a State Pension and an Employment-Based Pension with additional voluntary contributions. This structure reflects the goals of the best pension models—balancing adequacy (providing sufficient income for a dignified standard of living), sustainability (ensuring long-term financial viability), and integrity (maintaining strong governance and public trust).

1. State Pension – A National Foundation

A state pension must be financed through a properly managed, contributory national fund. It should never become an unpredictable burden on the current working population. Instead, it should be built transparently over time through structured National Insurance Contributions, as practised in many developed nations.

Eligibility should depend on years of contribution, with payments commencing only upon reaching a nationally defined retirement age—such as 65 years for both men and women—regardless of continued employment. Early access should not be permitted to ensure sustainability and fairness.

Importantly, the system must recognise unpaid yet invaluable national services, such as parenting. Full-time childcare from birth to age 16 constitutes an essential contribution to society. A mother or father who dedicates years to raising children nurtures the next generation and performs a profound national service. Such caregivers should receive credited contribution years—up to 16 years—towards their state pension entitlement. This is not a concession; it is long-overdue recognition.

2. Employment-Based Pension – Strengthening Security

The second pillar should be a contributory employment-based pension, structured either as a mandatory employer-based scheme or as a voluntary scheme. Contributions should be tax-incentivised to encourage participation, with proportional employer contributions.

In Sri Lanka, the Employees’ Provident Fund (EPF) provides an example of such a system. Established under Act No. 15 of 1958, it requires an 8% employee contribution and a 12% employer contribution, totalling 20%, and is managed by the Central Bank of Sri Lanka. This framework enables workers to build a statutory retirement fund that supplements their state pension.

Certain professions—such as healthcare, police, armed forces, and security services—demand extraordinary commitment, including 24-hour duty and service during public holidays. Sector-specific pension or insurance schemes may therefore be justified, provided they are transparent, actuarially sound, and proportionate to service.

Transitioning to Fairness

Existing pension or allowance schemes—such as the Aswesuma Welfare Benefit Scheme, Samurdhi Allowance, Elderly Allowance, Disability Allowance, Kidney Patient Allowance, and Thriposha Programme—can be gradually integrated into a unified national framework through actuarially calculated conversion mechanisms. Such reform would minimise disparities and eliminate politically negotiated privileges.

No legislator—or any officeholder—should receive disproportionately generous pension benefits for minimal years of service. Equality before the law must extend to retirement security. A transparent and unified structure would restore public trust and ensure fairness across all sectors.

A Broader Vision of Social Responsibility

Pension reform must form part of a wider social responsibility framework. Child benefits, maternity support, and disability assistance should be structured within sustainable and equitable systems. Politically motivated or unsustainable schemes must be replaced with rational, nationally coherent policies.

Unemployed adults should be supported primarily through training, skills development, and job placement initiatives. Limited temporary assistance may be necessary, but it should not discourage participation in available employment opportunities.

Ultimately, social responsibility must apply equally to all citizens. A well-designed pension system enables individuals to retire with dignity, independence, and peace of mind—without becoming a burden on their families or society.

This is not merely an economic reform. It is a moral imperative. If we are to call ourselves a just and caring nation, we must ensure that those who build the country are not left unprotected in their later years.