Regulatory body likely for universal pension coverage

The government is planning to establish a separate regulatory body for managing and expanding pension coverage in the country.
The decision follows its plan to bring all citizens under the universal pension scheme, the finance ministry sources said this week.
Once fully implemented, all retirees, both from public and private sectors as well as formal and informal sectors, would be eligible for old-age pension on their retirement.
The finance division is currently preparing a concept paper in this regard in the light of which a project would be initiated by the first quarter of next year for implementing the universal pension scheme.
The World Bank (WB) has already shown its interest in funding the project, sources said.
"We think, it is essential to establish a separate regulatory body for taking up this huge undertaking", said a high official of the finance division speaking on condition of anonymity.
"Under this regulatory body, there will be a trust body as well as a central record-keeping agency which will manage and validate a huge amount of pension data that needs to be dealt with", the official said.
"In addition, there will be a point at every upazila of the country for providing this pension-related service up to the grassroots level", he added.
This will be a contributory pension scheme under which the beneficiaries will also be eligible for annuity at the time of their retirement, sources informed.
Currently, only two million government employees in Bangladesh are entitled to pension on retirement.
In addition, poor people with virtually no means of support in their old age are also provided with a cash allowance of Tk. 500 per month.
About three million people across the country are currently enlisted under the Old Age Allowance Scheme.
However, the rest of the senior citizens, who even regularly paid their income tax during their active life, are not entitled to any pension after retirement.
In this context, there have been growing calls in recent times from various quarters for introducing the universal pension scheme in the country.
The proposal of introducing the pension coverage for all elderly members of the population has also been made in the 'National Social Security Strategy' that was formulated recently.
In this context, the finance ministry, in recent times,  initiated the process of introducing universal pension scheme for the citizens.
Experts also said the universal pension scheme will also become important given that the country is likely to witness a gradual aging of its population in the coming decades.
They also observed that the creation of such a universal pension scheme would also help boost investment in the financial sector.
However, concerned officials admitted that the pension scheme would be a very lengthy process given the large number of people that have to be brought under this initiative.
"It would take at least five years to create necessary infrastructure for the scheme while it would take almost ten years to bring all citizens under this universal pension scheme", the finance division official said.
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Source: The Financial Express


 

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