What is Sri Lanka’s support system like for the elderly population? According to Sri Lankan tradition it is the family support system that takes care of the elderly. Yet in the present era there is a decline in the traditional family system in Sri Lanka. Such an occurrence is taking place because of the rural to urban migration, fewer number of children to support the elderly, increased female labor force participation and the changes in attitudes and perception of the youth towards the elderly. The Sri Lankan elderly however are eligible for three types of social security payments. The payments include pensions, disability relief and Samurdhi payments. In 2002 around 30% of the elderly were receiving this form of payment. Yet in 2010 this percentage has been reduced to 27%. It means from 2002 to 2010 the majority of the elderly have not been entitled to this form of payment. During the same period, 90% of the Sri Lankan population has not been receiving remittances from sources either locally or abroad.
Meanwhile, the retirement system in Sri Lanka consists of a fully funded and pay-as-you-go system that covers both the formal and informal sectors. Collectively, these systems cover only 25% of the working age population. It implies that a large portion of that population has no social security. The largest pension scheme in Sri Lanka is the Employees Provident Fund. This is a fully funded contribution defined scheme which covers the entire formal private sector. The EPF is a defined contribution scheme with both employers and employees contributing to the private account of employees. The government sector workers have a PAYGO system, with benefits calculated according to final salary and years of service. The effectiveness of Sri Lanka’s EPF however has been undermined by the tendency of the government to use the funds as a means to subsidize the budget deficit.
With prudent investing and a modicum of financial planning, one’s financial status can be developed with ease which is needed to offset the weak social and government elderly support systems. Varying investment tools have their own element of risk. The risks are based on market movements, interest rates, currency movements, inflation and politics. In this sense it is a good idea to diversify one’s portfolio. The higher the risk, though, the higher the rate of return and the lower the risk, the lower the rate of return. Before mapping out one’s investment plan, it is a good idea to gauge one’s funding capacity, which means the funds available for investing and the investment time horizon. Both these aspects may vary from each investor. To navigate the investment landscape, it is strongly advised to seek professional assistance. An investment advisor could be useful to show the investment opportunities that maybe available that would be in accordance with one’s goals and risk appetite. Investors can also turn towards regulators such as the Central Bank and Colombo Stock Exchange for information.
Raising awareness programs to educate elders and the general public about how they can still contribute and actively participate in the economy is a crucial aspect. Presently, there are many such programs that are conducted island wide for the legal empowerment of elders where elderly people with outstanding qualities were presented with awards. Additionally, handbooks on elders are available for the general public as well which contains articles on the positive aspects of ageing, on leading an active and healthy lifestyle, prevention of diseases and many other topics that aim to empower the elderly citizens and motivate them towards participating in the society and economy.
It is speculated that the elderly population in Sri Lanka would exceed the working population in a space of approximately 15 years, necessitating the importance of taking concrete steps to guarantee financial security of the elderly and motivate them to be economically active in the society. While some of the major challenges of ageing include poverty, retirement, social isolation, discrimination and elderly abuse,, a report has established that active ageing will enable the process of optimizing health opportunities and enhancing the overall quality of life as people age.
Thanks to awareness programs and organizations that are dedicated towards empowering the elderly in the society, there are numerous opportunities for them to become actively involved in the economy as well. Some such opportunities could be based in the leisure industry, social work, medical industry, adult education, senior services, care industry, tourism and research and writing industry. Motivating them to participate in such activities would certainly improve the economic state of the country and also enable elders to be an active and integral part of the society.