Universal pension scheme aimed at helping people
Firstly, the goal of the universal pension scheme is to bring all the citizens of Bangladesh under its coverage. Currently, government and independent bodies provide pensions, but there is no specific funds allocated for them. Instead, every year, a specific amount is reserved in the budget for paying pension. As the number of employees and related expenses increase, the budget allocation for pension also increases. This is why the government has decided to transition to a funded pension scheme.
With a funded scheme, the government won't need to create a new budget for pension every year. Currently, it operates as an unfunded defined benefit pension system, but it will become a funded contributors' pension system under the new universal pension scheme. This scheme will provide pension to people who previously had none. Additionally, the Prottoy scheme, targeting autonomous government bodies, has been announced. Bangladesh has 403 autonomous government bodies, of which around 90 had a pension system, while 313 did not. The goal is to bring all these organisations under the same pension scheme.
For all latest news, follow The Daily Star's Google News channel. 
As this will be a funded scheme, the benefits are clear: all citizens can be covered, and it will ensure the sustainability of the pension system. Another reason for the universal pension scheme is to address the demographic changes in Bangladesh. The country is currently experiencing a demographic dividend, but after 2040, the working-age population will start to decrease. The prime minister's vision of a smart Bangladesh by 2041 will not be achievable if a large portion of the population is elderly without a pension support system. Therefore, this scheme shows foresight in protecting the future.
Regarding the current state of the Prottoy scheme, it's important to note that pension systems in many countries undergo reforms as needed. Similarly, Bangladesh is reforming its existing pension system. The government aims to introduce the universal pension scheme with the flexibility to make adjustments, additions or removals as necessary.
When the Prottoy scheme was announced, university teachers had some questions, which the pension authority addressed through the Finance Division and a press briefing. The teachers were still not satisfied. If we could clearly understand which specific parts are still dissatisfying for them after our press briefing, we could work on further addressing these issues. For example, the retirement age is set at 65, and while it cannot be decreased, it can be increased if needed. Many developed countries have raised their retirement age to manage demographic shifts, as seen recently in France where they raised their retirement age by two years. Recently we visited South Korea, and they also plan on increasing it.
When the demographic dividend decreases and the working-age population declines, increasing the retirement age becomes necessary to maintain a sufficient workforce.
So it is clear that just because a pension system has been announced, it doesn't mean that it is going to be the same forever. The reason for the pension system is to help people. Whenever there is a need to reform or change the pension system for the sake of the people, of course necessary changes will be made.
Md Golam Mostofa is a member of the National Pension Authority under the Finance Division.
Views expressed in this article are the author's own.
Follow The Daily Star Opinion on Facebook for the latest opinions, commentaries and analyses by experts and professionals. To contribute your article or letter to The Daily Star Opinion, see our guidelines for submission.
Comments