Officials said that, in line with proposals announced in the latest national budget, an additional Rs. 60 billion will need to be allocated annually over the next two years to finance pension increases. As a result, pension expenditure is expected to reach Rs. 565 billion next year and Rs. 565.65 billion the following year.
The Committee on Public Finance expressed serious concern over the rapidly increasing annual cost of pension payments. Sri Lanka currently has around 720,000 pensioners, with between 25,000 and 30,000 new retirees entering the pension system each year. Meanwhile, pension payments cease for only about 10,000 beneficiaries annually, resulting in a net increase of roughly 20,000 pensioners every year.
Committee Chairman Dr. Harsha de Silva stressed the need to closely examine the long-term fiscal implications of the growing pension bill. Officials also noted that although a contributory pension scheme has been under discussion since 2004, no concrete action has been taken to implement it.
Dr. de Silva said the committee had already begun a data analysis exercise on the issue and requested relevant officials to provide the necessary information to support the review, highlighting the need for long-term reforms to ensure the sustainability of the country's pension system.
