Fund Management - Employees' Provident Fund, Central Bank of Sri Lanka

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As at end 2008, the Fund (i.e. total liability to members or total of member balances) was Rs. 645 billion registering an increase of 17.4 per cent from Rs. 549.4 billion in end 2007. The increase in number of contributing members and their contribution levels are the main causes for the growth of the Fund.

Investment of Funds

With the approval of the Monetary Board, the Investment Committee has designed an Investment Policy Statement and Investment and Securities Trading Guidelines for the EPF. The Investment Committee meets daily to explore and decide investments in line with EPF’s investment policy while the Accounts and Fund Management Division implement these decisions accordingly. Further, EPF Department obtains the consent of the Monetary Board for the investment decisions which are beyond the authority level of the Investment Committee.

Being a retirement benefit scheme, EPF adopts an investment strategy which ensures long-term growth and safety of the Fund. Hence, substantial portion of the Fund has been placed in Government Securities (Treasury Bonds, Bills and Rupee Loans) while the balance part has been invested in listed and unlisted equities and high credit worthy corporate debt instruments. With the view of maintaining a healthy liquidity position, 0.57% of the Fund was invested in highly liquid securities such as repurchase agreements at desirable interest rates.

The total investment portfolio of the Fund grew by 15.8 per cent to Rs.627.2 billion as at end 2008 from Rs. 541.5 billion as at end 2007. The growth in the investment portfolio was mainly due to the expansion of the Fund (i.e. member balances) coupled with the increased rate of return.

Investment Portfolio

In the year under review, 97.07 per cent of the investments of the Fund represented Government securities while balance 2.93 per cent was invested in private sector securities comprising of debt instruments, equity and Repurchase Agreements. In year 2007, 96.5 per cent of the investments consisted of Government securities and remaining 3.5 per cent comprised of private sector securities.

Asset Allocation