Gamini Lokuge

Minister Lokuge: Not so strong on strength of EPF

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The Employees Provident Fund has become the strongest fund in Asia today.

Parliament Hansard | February 9, 2021

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False

Fact Check

FactCheck considered the word “strongest” as used by the minister to signify either the largest fund, or the fund with the highest rate of return. 

To check this claim, FactCheck looked at official sources from multiple countries in Asia to assess the size and rates of return of those funds in relation to Sri Lanka’s EPF. 

On size, Sri Lanka’s pension fund amounted to USD 13 billion in 2019. Exhibit 1 provides data on nine pension funds in Asia that are larger than Sri Lanka’s EPF.  

On rate of return, because these funds are in different currencies, the returns on these funds were compared by standardising them to USD equivalent return for a five year period (2015 – 2019). Sri Lanka’s EPF had a compound average return rate of 3.6% during the period. Exhibit 1 provides data on rates of return as well, showing two funds in Asia that have larger returns than Sri Lanka’s EPF. These were the National Social Security Fund in China and Employees Provident Fund in India, which had return rates of 5.1% and 5.7% respectively. 

Sri Lanka’s EPF is neither the largest pension fund in Asia nor the fund with the highest USD equivalent return rate. Therefore, we classify the minister’s statement as FALSE. 

*FactCheck’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck will revisit the assessment. 



Sources

Government Pension Investment Fund of Japan, Annual Report Fiscal Year 2019, available at: https://www.gpif.go.jp/en/performance/past-performances.html[Last accessed: 06 April 2021] 

National Pension Service of Republic of Korea, 2019 National Pension Fund Annual Report, available at: https://fund.nps.or.kr/jsppage/fund/prs_e/prs_e_04.jsp [Last accessed: 06 April 2021] 

Employees Provident Fund of Malaysia, Annual Report 2019, available at:  https://www.kwsp.gov.my/annualreport2019/index-en.html [Last accessed: 06 April 2021] 

National Council of Social Security Fund of China, Annual report of the Social Security Fund of the National Council of Social Security Funds for 2019, available at:  http://www.ssf.gov.cn/cwsj/ndbg/  [Last accessed: 06 April 2021] 

Central Provident Fund Board of Singapore, Annual report 2019, available at: 

 https://www.cpf.gov.sg/Members/AboutUs/about-us-info/annual-report [Last accessed: 06 April 2021] 

Mandatory Provident Fund Schemes Authority of Honkong2019 -20 Annual report, available at: https://www.mpfa.org.hk/en/info-center/publications/annual-reports [Last accessed: 06 April 2021] 

Employee Provident Fund Organisation of India, Annual Reports 2018 – 2019, available at: https://search.epfindia.gov.in/OperationStatistics/operational_stats_en.php [Last accessed: 06 April 2021] 

Babar Zaidi, ‘ EPF may not give more than 7% interest for FY19-20 due to coronavirus impact: Here’s why’, Economic Times (13 April 2020), available at: https://economictimes.indiatimes.com/wealth/invest/epf-may-not-give-more-than-7-interest-for-fy19-20-due-to-coronavirus-impact-heres-why/articleshow/75092943.cms?from=mdr [Last accessed: 06 April 2021] 

Organisation for Economic Co-operation and Development, Pension Funds in Figures, available at: http://www.oecd.org/pensions/private-pensions/Pension-Funds-in-Figures-2020.pdf [Last accessed: 06 April 2021] 

Bloomberg News, ‘Government Pension Fund buys foreign stocks to boost returns’, Bangkok Post  (24 August 2020), available at:  https://www.bangkokpost.com/business/1973535/government-pension-fund-buys-foreign-stocks-to-boost-returns [Last accessed: 06 April 2021] 

Employee Provident Fund of Sri Lanka, Annual Report 2019, available at: http://www.epf.lk/annual_reports.php [Last accessed: 06 April 2021] 

Employee Provident Fund of Sri Lanka Audited Financial Statements 2019 – English, available at: http://www.epf.lk/financial_statements.php [Last accessed: 06 April 2021] 

Official website of Thinking Ahead Institute, The world’s largest pension funds – year ended 2017 available at: https://www.thinkingaheadinstitute.org/research-papers/the-worlds-largest-pension-funds-year-ended-2017/ [Last accessed: 06 April 2021] 

Official website of World Bank, World Development Indicators’, available at: https://databank.worldbank.org/reports.aspx?source=world-development-indicators [Last accessed: 06 April 2021] 

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