Making the Universal Pension Scheme a success

The need for a Universal Pension Scheme has been felt strongly in recent years as the number of senior citizens is increasing quickly in Bangladesh. The average life expectancy in Bangladesh has grown steadily over the years, at present 73 years. According to the Bangladesh Bureau of Statistics, the elderly will make up one-fifth of our total population by 2031, compared to just 11 per cent in 2017. The increased longevity is a reflection of Bangladesh's improving socio-economic condition. However, the lack of adequate old-age support systems puts the elderly in a vulnerable position.

Currently, only the public sector employees are entitled to pensions in Bangladesh. Provident fund and gratuity are available in some organisations in the private sector. Meanwhile, the government provides old-age allowance under its social safety net programme. Be that as it may, about 40 percent of the population currently has no pension access.

Thankfully things are going to change for the better. The long-awaited universal pension scheme, one of the ruling party's 2008 election manifesto pledges is becoming a reality this fiscal year.

According to a report published in this newspaper, the cabinet on Monday approved the draft of the National Pension Authority Act-2022 to introduce a universal pension scheme for citizens aged between 18 and 50. The report states that the approval came at the cabinet meeting held on Monday with Prime Minister Sheikh Hasina in the chair.

While briefing journalists at the secretariat, the Cabinet Secretary Khandaker Anwarul Islam said that a 15-member governing board headed by the Finance Minister would be formed and a separate fund created under the National Pension Authority.

Citizens living at home or abroad are eligible to participate in the pension system. Back on March 29, this year, the government, with specific terms and conditions, published a draft of the National Pension Authority Act-2022. A senior citizen, after his or her retirement at 60, will get a pension per month as per his contribution to the fund in their entire lifespan. If an enrolled pensioner dies, their family members will get pension benefits.

Unfortunately, Bangladesh's social security system is woefully inadequate compared to those in third world economies with no higher per capita incomes. The social structure of our country is such that parents work for their children all their lives, bear all their expenses, and do not keep anything for themselves. When they do not have income in old age and do not have savings, they become a burden to their children. In such a scenario, many children do not take proper care of their parents or pay their expenses. Then they live a tough life. The Universal Pension Scheme is a step in the right direction. 

Bangladeshi society is changing at a fast pace. Joint families are splitting up, and nuclear families have become the norm. However, many elderly parents cannot stay in these single-family homes due to increasing costs or lack of space or care. Many of them are living alone, or they are living in old age homes. This is increasing their expenses. They also have to bear the costs of medical treatment and other necessities. It has become challenging for them to meet these costs. So the problems of older people have already increased a lot. This initiative of providing security during old age through the UPS could bring relief to many people. However, it all depends on how the scheme is implemented.

To keep the pension scheme attractive, the government must provide higher returns than the currently available savings certificates.

According to experts, the issue of accountability and good governance is at the forefront regarding implementing the UPS. It is widely known  that there are instances of poor governance and misappropriation of resources whenever a large amount of money is involved.