1. 1 Social Insurance Mr. W.A.D.S. Gunasinghe Deputy Director, Department of National Planning, Social Insurance

2. 2 Highlights of the Report Improving coverage, administration and financial sustainability of existing schemes – 2/3 of labour force not covered – Annuitization of benefits (except for public pension) – Non portability EPF and contributory schemes – No indexation – Pensions account for a substantial amount in the budget but benefits ARE

3. 3 Highlights of the Report Establishment of a unitary system Unemployment Insurance –suggestions – Rationale - other forms of social insurance has to be strengthened to make labour reforms From job protection to protecting workers Labour market programmes not adequate

4. 4 Social Protection Strategy Framework Strategic FocusWelfare Assistance Safety NetsSocial InsuranceLabour Market Interventions Disaster Relief InstrumentsServices, CashCash, Food for Work Cash, pensionServicesFood, Shelter, Services (health) Targeted GroupDisabled, destitute elderly Chronically poor, women, children Elderly, transitory poor Unemployed, new entrants to labour market Communities exposed to disasters Programmes Assistance to patients, disabled, elderly homes, vocational training Samurdhi Cash Grants, Nutrition Programmes Pensions, and other contributory pension schemes information networks, Skill development training, WFP, Disaster Relief Programmes Trends Expects a slight decrease Poverty levels expected to be come down Aging populationNeed more emphasis on the informal Sector M/M disasters expected to be come down / Decreasing risk of N/ Disasters due to EWS & networks in place Medium Term Expenditure Direction Un-change or slightly decreasing Decreasing Proper targeting Increasing Assumed to be decreasing

5. 5 Priorities of the National Development Plan Ensure and secure rights of senior citizens to have a decent standard of living Providing security for vulnerable groups who are outside formal sector (such as unpaid household workers, migrant workers, three wheeler drivers) Establishing a national pension scheme for self-employed Facilitating other forms of social security for older people – Elderly homes – CBOs / NGOs – Healthcare services – Private sector in care business

6. 6 Priorities of the National Development Plan Privileges for senior citizens Increasing benefits of existing schemes Collaborative action of government institutions, civil society and the private sector Need of strengthening the capacity of the relevant institutions

7. 7 Issues / Challenges Contribution in pension– whether it is practical comparing modest salaries + 7% W&OP (survivor benefits) Increasing retirement age - dependency, unemployment –paradox Eliminating gender biasness

8. 8 Issues / Challenges One of the most welfare oriented state Over 10 % of total government expenditure is on welfare / Pension budget –Rs.42 bn for 2007 One of the largest civil service in Asia (this is also linked to wide welfare services) Medium Term Target – to achieve 8% growth Investment rate 30-35% has to be maintained Poverty target is halving poverty rates by 2015

9. 9 Issues / Challenges Unemployment Insurance schemes – Rates and composition have to be assessed – It is likely that informal sector and low income groups who are the most needy is often overlooked

10. 10 Thank You!