The government is likely to launch the universal pension scheme (UPS) nationwide in August on an experimental basis, officials said.
Individuals can participate in the programme with contributions ranging from a minimum of Tk500 to a maximum of Tk5,000 per month, they said.
The scheme will initially target four categories – private sector employees, non-resident Bangladeshis, individuals from the informal sector, and insolvent individuals, they said, adding that individuals from various professions, such as rickshaw pullers, domestic workers, street vendors, and hawkers, will be included in the informal sector.
The Finance Ministry will formally announce the date to inaugurate the programme after availing an appointment of the prime minister.
Finance Minister AHM Mustafa Kamal in his budget speech for the fiscal year 2023-24 expressed hope that the universal pension system will be introduced in the country from July, the first month of the current fiscal year.
Earlier, on January 24, Parliament passed the Universal Pension Management Bill-2023 to bring all citizens under pension. The bill provides for all citizens aged 18 to 50 years to enjoy pension benefits for life after completing 60 years by paying a fixed rate of contributions.
The officials of the Ministry of Finance said that the National Pension Authority will sign a memorandum of understanding (MOU) with five organizations before the pension programme is launched. These are - Election Commission, Directorate of Immigration and Passports, Office of the Registrar General of Births and Deaths, Sonali Bank and Bangladesh Data Center Company Limited.
Draft of these MoUs has already been prepared and they will be signed after availing an appointment of the prime minister.
The pension scheme will not be implemented by signing MoUs only, it is also necessary to make progress on the work on application programming interface (API), which allows two or more computer programmes to communicate with each other.
There will be no cash transaction in the pension scheme and all transactions will be made online.
Draft of gazettes on three guidelines on employee recruitment, eligibility and registration process, and pension scheme have already been prepared. These gazettes will be issued before introducing the pension scheme.
Initially four categories of persons will be covered under the pension scheme. They are expatriate Bangladeshis, private sector workers, informal sector workers and poor people.
Monthly subscription can be minimum Tk 500 and maximum up to Tk 5,000. However, there is an opportunity to change the programme and increase the amount of subscription.
According to the bill, the contributor will get a monthly pension if he or she contributes continuously for at least 10 years. The pension will be paid against the deposits with the accumulated profits in the pension fund on the completion of the age of 60 years of the contributor. Bangladeshi workers working abroad can participate in this programme.
It is also said that the government can give a portion of the monthly contribution to the pension fund as a grant to the citizens below the lower income limit, or in case of indigent contributors.
According to the bill, a pensioner will get pension benefits for a lifetime. However, if he or she dies before completing 75 years while on pension, his nominee will be entitled to a monthly pension for the remaining period (up to the age of 75 years of the original pensioner). If the subscriber dies at least 10 years before the subscription is made, the deposited money will be returned to his nominee along with the profit.
If the money deposited in the pension fund needs to be withdrawn at any stage, the subscriber can withdraw a maximum of 50 percent of the deposited money as a loan, which has to be paid with fees. The bill also states that the money received from the pension will be exempt from income tax and the contributions earmarked for the pension will be treated as investments and will be considered for tax deduction.
