Employees of state enterprises to get monthly pension under new scheme

The government has introduced a new product under the Universal Pension Scheme (UPS) to help the existing employees of state enterprises, autonomous bodies and their affiliated organisations avail pension benefits monthly.

In a statement on Wednesday, the finance ministry said the interests of employees of the state-owned organisations will not be affected by the Prottoy scheme. Their pension and gratuity benefits will rather remain intact.

Officials and staff members of the companies who have at least 10 years of service age, can subscribe to the new scheme if they are interested.

The new scheme is particularly for the employees who will join state-run organisations from July 1, 2024, and onward. Through the participation in the Prottoy scheme, the financial security of employees will be protected, said the statement.

The finance ministry said few autonomous, state-run, or statutory organisations have pension schemes. Most employees of the companies are eligible for gratuity and contributory provident fund benefits but are not entitled to a monthly pension.

They get benefits after their retirement. As a result, the employees often face financial uncertainty after retirement, it said.

So, the government has introduced the scheme as an alternative to existing arrangements to ensure the financial and social security of state employees in post-retirement life, the press release said.

Under the plan, 10 percent of the basic salary, or up to a maximum of Tk 5,000, will be deducted from employees while the organisation will match the amount deposited by the employees.

For example, if a person deposits Tk 2,500 from their basic salary, the same amount will be added by their organisation.

The combined amount will be deposited in the pension scheme to be managed by the National Pension Authority (NPA).

The NPA will invest the funds in profitable sectors and provide a monthly pension to the holders based on the profits and the amount deposited.

If an employee deposits the fund each month throughout a 30-year career, they will get Tk 62,330 as a monthly pension under the Prottoy scheme after 60 years of age.

During the 30-year career, a public sector employee will deposit Tk 9 lakh from his or her salary and Tk 9 lakh will come from the organisation.

If the person passes away at the age of 75, the nominees will get more than Tk 1.12 crore, which is around 12.5 times greater than the deposited amount in 15 years.

The pension amount may increase if the profit margin from the investment of the fund increases.