Universal Pension Scheme

The need for a publicly-funded, universal pension scheme that will overcome financial miseries among the aged has been felt for a long time in Bangladesh, which constitutionally is a welfare state. Senior citizens constituted about eight per cent of the total population of Bangladesh in 2019. The proportion of older people is expected to become 21.9 per cent in 2050, with 36 million people aged over 60. This means that one will be a senior citizen for every five Bangladeshis. So, the introduction of a universal pension scheme based on the election manifesto of 2008 of the Awami League government is heartening. The government deserves special thanks for this noble venture.

The initiative is commendable because there are only a few areas in Bangladesh where pension facilities exist; the public sector with about two million employees and a few autonomous institutions where gratuities and contributory provident funds work as a substitute for pension. Unfortunately, even in many private organizations with a well-defined service structure, employees are not entitled to such facilities even with job experience of more than two decades. The average life expectancy in Bangladesh is now 73 years. The number will go up to 80 in 2050 and 85 in 2075. It means that a working person will live for another 20 years after his retirement in the next three decades but will not have any income. Only the government can and should take responsibility.

According to a report published in this newspaper yesterday, the government on Tuesday published the draft National Pension Authority Act, 2022. Taking the National Identity Card (NID) information as benchmark, any citizens living home or abroad with ages ranging from 18 to 50 years are eligible to participate in the pension system, as per the draft act. This benefit will initially remain voluntary until making it mandatory through a gazette. To qualify for the pension scheme, the beneficiaries have to deposit a certain amount into the pension account at the bank every month for ten consecutive years. The monthly subscription rate will be fixed. The government will pay a certain amount of the installment for low-income people and the destitute. The funds thus raised will be invested elsewhere. Pension will start at the age of sixty. Pensioners will be given a lifetime pension. The pension's installment will be considered an investment and tax rebate.

In contrast, the monthly pension will remain out of income tax. One may borrow up to 50 per cent of the deposited funds, which must be returned with interest. The report states that after enacting the National Pension Authority Act, 2022, an authority will run the universal pension system.

The government has fixed the age limit for the universal pension at 18–50 years. This may result in several problems. Bangladesh society is changing at a fast pace. Joint families are becoming things of the past, and nuclear families have become the norm. Because of the increased cost of living or lack of space or lack of care, many elderly parents cannot stay in these single-family homes. Either they are living alone or living in an old age home. This is increasing their expenses. They also have to bear the costs of medical treatment and medicine. It has become challenging for them to meet these costs. Will the government keep these older people in mind? Many older people have died in the last two years during the Covid-19 pandemic. For many, expenses have increased. But they still did not come under social security, even though they needed it. These people can still be given financial and medical assistance.

The universal pension scheme is commensurate with Bangladesh’s goal of becoming an advanced country by 2041. Experts believe that a mechanism should be in place so that the beneficiaries can receive periodic statements with updates on their income. The UPS should be fully automated with all relevant information available to the pension account holders. Proper implementation of UPS will prove that the country is moving in the right direction. We urge the authorities concerned that the pensioner can receive their money at the right time without facing any hassles.