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The Employees’ Trust Fund was established on 1st March 1981 under the provisions of  ETF Act No. 46 of 1980. The Fund is administrated by the Employees’ Trust Fund Board and at present the ETF Board is functioning under Hon. Anura Kumara Dissanayake of the Ministry of Finance, Planning and Economic Development

The provisions of this Act apply to every enterprise in the public or private sector related to any class or category specified in a Gazette notification issued by the Honorable Minister. Self-employed individuals and migrant workers are also eligible to contribute to the fund and obtain membership.

At present, the fund has approximately 2.6 million active members, covering around 79,000 employers. As of December 31, 2021, the value of the fund was approximately Rs. 406 billion. To decentralize the operations of the EPF Board and provide better services to its members, a branch network was introduced in 1995.

ETF Act and the Amendments

Principal Act Employees’ Trust Fund Act No. 46 of 1980 (certified on 29th Oct. 1980)

Amendments to the Principal Act

  • Act No. 3 of 1982 (Changes of Surcharges etc.)
  • Act No. 47 of 1988 (Regarding nominees, contributions by migrant workers, definitions of earnings etc.)
  • Act No. 18 of 1993 (Regarding surcharges for delayed returns etc.)
  • Act No. 19 of 1993(Special Provisions)(Removal of Section 97(a) of the university act.

Gazette Notifications issued under the Act

  • No. 121 in 26/12/1980 Gazette
  • No. 121/3 in 30/12/1980 Gazette
  • No. 125 in 23/01/1981Gazette
  • No. 127/3 in 09/02/1981 Gazette
  • No. 154/8 in 18/08/1981 Gazette
  • No. 171/2 in 14/12/1981 Gazette
  • No. 688/50 in 15/11/1991 Gazette
  • No. 979/2 in 19/06/1997 Gazette
    (Change of the Ministry from the Ministry of Labour to the Ministry of Finance)

The Objectives of the Board

  • (a). to promote employee ownership, employee welfare, economic democracy through participation in financing and investment;
  • (b). to promote the employee participation in management through the acquisition of equity interest in enterprises;
  • (c).to provide for non-contributory benefit to employees on retirement; and
  • (d).to do all such other acts or things as may be necessary for, the objectives specified in paragraphs (a), (b) and (c) above.

Employees covered by the ETF Act

  • All employees in Public & Private Sector institutions are covered by the ETF Act. This includes any person employed on a casual, temporary, contract or piece-rate basis and also any apprentice or learner who is paid a remuneration, irrespective of age.
  • Self-employed persons and migrant workers also may become members of this fund and contribute voluntarily on monthly basis.

Employees in the following categories are not covered by the ETF Act (Extraordinary Gazette No. 171/2 of 14/12/1981)

  • Domestic servants in any household.Domestic servants in any household.
  • Charitable institutions with less than 10 employees. If the no. of employees is over 10 such institutions are liable to pay from 01/12/91.
  • Institutions giving industrial training to orphans, deaf, dumb and blind persons.
  • Institutions carried on by family members (family the spouse and children of such person)

Employers covered by the ETF Act

  • All employers in public sector institutions whose employees are not eligible to the Govt. Pension Scheme.
  • All employers in the private sector irrespective of the no. of employees employed.
  • All employers in public and private sector who are maintaining approved Provident Fund accounts for their employees.

Definition of Employer

“Employer” means any person who employs, or on whose behalf any other person employs any workman and includes a body of employers (whether such body is a firm, company, corporation or trade union) and any person, who  on behalf of any other person employs any workman, and includes a competent authority of a business undertaking vested in the Government under any written law, the legal heir, successor in law, executor or administrator and liquidator of a company, and in the case of an unincorporated body the president or the secretary of such body, and in the case of a partnership the managing partner or manager.

Definition of Employee

“Employee” means any person who has entered into or works under a contract with an employer in any capacity, whether the contract is expressed or implied or orally or in writing, and whether it is a contract of service or of apprenticeship or a contract personally to execute any work of labour and includes any person ordinarily  employed under any such contract, whether such person is, or is not in employment at any particular time.

Types of Earnings covered by the ETF Act

“Earnings” is same as defined in the Employees’ Provident Fund Act (Section 47) when calculating ETF the following payment and allowances will be considered.

  • wages, salary or fees
  • cost of living allowance, special living allowance and other similar allowance
  • payment in respect of holidays;
  • the cash value of any cooked or uncooked food provided by the employer to employees in prescribed employments and any such commodity used in the preparation or composition of any food as is so provided, such value being assessed by the Employer subject to an appeal to the Commissioner whose decision on such appeal shall be final;
  • Meal allowance
  • such other forms of remuneration as may be prescribed.

Registration of Employers with the ETF

Unlike EPF, ETF has no registration procedure prior to making contributions.
The first and foremost obligation of any employer who has started a business and recruited his 1st employee is to register the business with the Commissioner General of Labour and obtain a registration Number for the employment.
On receipt of the Registration Number from the Labour Department the employer must either write or personally call over  at the ETF Office and obtain the relevant forms and instructions to make payments to the ETF.
Once the 1st contribution is received at the ETF Board that employer will be entered in the ‘‘Contributing Employers List’’ in the ETF.
Employers who are contributing to approved Provident Funds are given separate Numbers from the ETF. Such employers should quote that Number in all monthly remittance forms half yearly returns and other correspondences.

Assigning of Numbers to members

  • It is the responsibility of the employer to assign numbers to his employees.
  • Under no circumstances a number once given to an Employee should be allocated to another employee even if such employee has left the organization.
  • If an employee who has resigned rejoins the same company after obtaining the ETF refund should be given a new number.

Contribution Procedure

  • Contributions are due from employers at the rate of 3% of every employee’s monthly total earnings.
  • No employer shall deduct from the earnings of an employee any sum which that employer is liable to pay as contribution or surcharges to the ETF.
  • Contributions due for a particular month should be paid on or before the last day of the succeeding month.
  • All remittances should be sent under cover of an Advice of Remittance Form R1 or R4. Advice of Remittance Form R1 is meant to be used by employers employing 15 or more employees and Advice of Remittance R4 by employers having less than 15 employees.
  • Employers using R4 forms (Smaller Category) should convert to use R1 forms (Larger Category) when the number of employees is increased to 15 or above in the organization. As the accounting procedure for larger category employers is different from that of smaller category employers, employers presently using R4 forms should write to Finance Manager(Revenue) before switching over to R1 form. However employers who are making payments with R1 forms should continue the same procedure even though the number of employees subsequently falls below 15.

1st half of the year- On or before 31st August of the same year

2nd half of the year- On or before end of February of the following  year

 

  • The procedure of making remittances to the ETF is set out briefly on the reverse of the R1/R4 forms.
  • Only the employers who are making contributions with R1 forms are required to submit individual contribution details in half yearly Form II return. These details will be submitted by employers under smaller category in the R4 forms sent every month.
  • Page totals of Form II sheets should be entered in the summary sheet and the totals of summary sheet should be carried forward to the employer’s contributions reconciliation statement where monthly contribution details should be shown.
  • Employers who are preparing separate Form II returns for clerical, permanent and executive staff or each work site located island wide should ensure that the returns from all those units are collected at the employers Head Office and sent as one batch according to the serial number of the employees to the ETF Office.
  • Entering National Identity Card Numbers of all the members in the Form II Returns and R4 forms correctly and legibly is a must.
  • Complete and accurate Form II Returns should be sent to Manager (Member Accounts), ETF Board, "Mehewara Piyesa" 21st Floor, Colombo 05 before the due date as shown below :

Contact Us

Employees' Trust Fund Board
19 - 23 Floors, "Mehewara Piyesa" ,
P.O.Box 807,
Kirula Road, Narahenpita,
Colombo 05.

+94-11-7747200

+94-11-2503917

info@etfb.lk

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