Call for robust pension to avoid needs in old-age

The increase of life expectancy, coupled with the gradual disappearance of the extended family system, makes it imperative for Bangladesh to design a robust pension system to avoid impoverishment in old-age and accompanying social distress, speakers at a webinar said on Thursday.

The Institute of Chartered Accountants of Bangladesh (ICAB) organised a virtual webinar titled “Universal Pension System in Bangladesh —A Path Breaking Intervention”.

While addressing the webinar, experts laid stress on timely and smart policy interventions to avert an impending pension crisis. A fully funded pension system should be introduced with options of investment in stock or bonds, they said. 

Senior Secretary of the Finance Division of Finance Ministry Abdur Rouf Talukder attended the webinar as the chief guest while Chairman, Bangladesh Energy & Power Research Council Satyajit Karmaker, Finance Division Additional Secretary (Regulation) Md Golam Mostafa were present as special guests.

Dr Kavim V Bhatnagar, the government’s Universal Pension Reform International expert and consultant and Policy Research Institute of Bangladesh Executive Director Ahsan H Mansur spoke in the webinar as panel speakers.

ICAB President Mahmudul Hasan Khusru delivered the address of welcome while World Bank’s Lead Governance Specialist on Financial Management Suraiya Zannath Khan, presented the keynote paper. ICAB Council Member and former President Dewan Nurul Islam presided over the webinar as the session chairman. ICAB CEO Shubhashish Bose delivered an introductory speech and Vice President Maria Howlader made the concluding remarks.

The speaker also said the finance minister announced an ‘Introduction of Universal Pension Scheme’ in his FY 2019-20 budget speech with the rationale to provide wider coverage.

Finance Division Senior Secretary Abdur Rouf Talukder said, “A modern and efficient pension administration and management system directly contributes to improved services to civil servants. As pension constitutes a considerable size of public expenditure, a well-administered pension system also contributes to efficient fiscal management and reduces the risk of system loss.”

He said that civil servants became the direct beneficiary of reforms that have been implemented over the decades in the area of PFM system and institutions.

The secretary also said the government is committed to modernising the pension payroll and administration as part of its commitment to achieving good governance and efficient service delivery in all areas.

Upon analysis and survey on the need to modernise the administration of civil service pensions, the Finance Division has taken initiative to integrate payroll and personnel records, he added.

ICAB President Mahmudul Hasan Khusru said Bangladesh’s dual graduation journey from a least developed country to a developing country, and from a low-income country to a lower-middle-income country, entails a need to design and pursue policies that are similar to the growing expectations of its citizens for better social welfare and a more economically secured life.

During this pandemic, the inequality between rich and poor has risen and created yeaning gap as the middle-income group people turned poor losing their jobs. Inequality in Bangladesh is a cause of serious concern, a Universal Pension System could serve as a tool to reduce this inequality in income distribution, he suggested.