A step towards ensuring dignity and security

To foster social justice, and economic stability, and provide a safety net for its citizens Bangladesh government has planned to launch a universal pension system from FY2023-24. This initiative aims to address the pressing issue of financial insecurity among the elderly population, ensuring a dignified and secure future for all Bangladeshis.

One of the primary objectives of the universal pension system is to tackle the issue of financial insecurity that plagues many elderly citizens. As the population ages, a significant portion of the elderly population faces the challenge of meeting their basic needs and healthcare expenses. The introduction of a universal pension will provide a reliable source of income to individuals during their retirement years, enabling them to lead a decent life and meet their financial obligations.

The ‘Universal Pension Management Act, of 2023’ has already been passed by the Parliament. Finance Minister mentioned that he had pledged to introduce a universal pension system in the budget speech for FY 2022-23 following Awami League’s election manifesto.

Under the proposed scheme, a beneficiary can enjoy pension benefits subject to the payment of subscription up to the age of 60 years if s/he enrols at the age between 18 to 50 years, whereas those who enrol at their age of more than 50 years have to pay subscription for a minimum of 10 years.

The expatriate Bangladeshis would be able to participate in this scheme. If the pensioner dies before attaining the age of 75 years while on pension, the nominee of the pensioner will be entitled to the pension for the remaining period of the pensioner’s completion of 75 years.

The implementation of the pension system however aligns with the principles of social justice, as it aims to reduce inequality and ensure equal opportunities for all citizens. Currently, many retired individuals in Bangladesh face a bleak future due to the lack of a formal pension system. The universal pension will bridge this gap and provide a level playing field for all, regardless of their socio-economic background. It will offer a lifeline to those who have dedicated their lives to the progress of the nation, creating a more inclusive and compassionate society.

The system will also contribute to enhancing economic stability in Bangladesh. By providing a reliable income stream to the elderly, it will reduce their dependence on family members and enable them to become financially independent. This, in turn, will free up resources for the working-age population to invest in education, entrepreneurship, and other productive endeavours, bolstering economic growth and development. Moreover, a steady pension income will boost domestic consumption and stimulate the economy, leading to increased demand for goods and services.

Introducing a universal pension system also has the potential to instil a culture of saving and financial planning among the citizens of the country. By encouraging individuals to contribute to their pension funds throughout their working lives, the programme will promote long-term financial security and help individuals prepare for retirement. This shift towards a savings-oriented mindset will not only benefit individuals but also contribute to the overall economic resilience of the country.

The successful implementation of a universal pension system requires careful planning and fiscal considerations. The government must devise a sustainable financing model that ensures the long-term viability of the programme. Exploring avenues such as increased tax revenue, strategic allocation of resources, and partnerships with the private sector can help generate the necessary funds.