New pension scheme sparks debate amid low response

A newly introduced instrument to bring officials and employees of state-owned autonomous and semi-autonomous bodies under the Universal Pension Scheme has sparked debate after the previous four ones hardly became popular.

According to a gazette published on March 14, changes had been made to the Universal Pension Management Act 2023 to introduce the new instrument, Prattay.

The new instrument has been made mandatory for all officials and employees, who will join state-owned autonomous and semi-autonomous bodies from July 1, 2024, onwards.

This is the fifth instrument of the much-vaunted scheme aimed at bringing all senior citizens under pension benefits in the future.

The pension authorities initially introduced four instruments—Probash, Pragati, Surokkha, and Samata—in August 2023 without any comprehensive investment plans for the money in profitable ventures.

It is struggling to make the instruments popular, as only 26,851 people have joined them in the first seven months by depositing Tk 35.27 crore. They include 12,876 subscribers, who joined the schemes in the first month and deposited Tk 11.52 crore.

Fifth Instrument Prattay has already sparked negative reactions among many of the state-owned entities, such as authorities, directorates, public universities, institutions, councils, commissions, academies, banks, and corporations.

On Saturday, the Federation of Bangladesh University Teachers’ Association said in a statement that the finance division directives disappointed teachers across the county.

The implementation of the instrument will create a discrepancy towards teachers, said the statement, demanding its cancellation.

While talking to New Age on Sunday, the association secretary general, Md Nizamul Haque Bhuiyan, said that they were forced to issue the statement to safeguard the interests of the teachers.

The introduction of such a policy will discourage meritorious students from taking up teaching as a profession, he said.

There are around 16,000 public university teachers active under affiliated bodies of the federation.

Nizamul Haque said that affiliated bodies of the federation would continue to lodge protests until the cancellation of the gazette and the directive by the finance ministry.

At present, more than 2.5 lakh officials and employees serve state-owned bodies and entities.

The retired officials of the state-owned autonomous and semi-autonomous bodies enjoy pensions—90 per cent of the basic monthly salary—like public officers and employees do.

Besides, they also receive other allowances, like dearness and medical.

However, under the new pension scheme, they will contribute a certain amount of fee for the subscription of the instrument for a certain period to qualify for the pension benefit after the retirement age of 60.

The officials and employees of state-owned autonomous or semi-autonomous bodies will contribute a certain amount to the subscription from their institutions.

According to the gazette, an employee of the state-owned autonomous or semi-autonomous bodies will get a pension of Tk 3,060 monthly if he or she contributes Tk 2,000 monthly for 10 years.

Asked to make a comment on the new instrument, state minister for finance Waseqa Ayesha Khan said on Monday at her secretariat office that the universal pension scheme was meant for the welfare of all, both public and private.

‘Why are you all talking about only public sector officials?’ she asked.

The gazette also said an employee of the state-owned autonomous or semi-autonomous bodies already in service could switch to the new scheme.

National Pension Scheme member Md Golam Mostafa said they did not know the logic of the Federation of Bangladesh University Teachers’ Association’s demand for the cancellation of the gazette.

The pension authority has nothing to do with such demands since it was issued by the government, said the member while describing that four schemes in August 2023 were introduced only for private job holders.

Pragati, Samata, and Probash were contributory schemes, as the government would not share the subscription fees of those schemes.

The contribution from the government to the monthly subscription fee under Surokkha is designed for low-income groups.

Golam Mostafa said it was already stated in the act that government officials would be included in the pension scheme after notification of an order.

The current order has maintained the sequence, he said.

He, however, said that he did not know exactly when about 12 lakh government officials would be brought under the Universal Pension Scheme.

Bangladesh Bank is among the state-owned autonomous bodies to ask banks to take measures to encourage their officials and employees to join the government’s Universal Pension Scheme.

Former Bangladesh Bank governor Salehuddin Ahmed said BB should at least make a study to determine the benefits of both the new instrument and existing pension benefits.

Unlike other countries, BB officials do not even enjoy a separate pay scale, he said, adding that the government should give a timeframe to bring all its officials under the same benefit.

While launching the scheme, immediate past finance minister AHM Mustafa Kamal hoped that the scheme would attract huge subscribers and help the government tackle the credit crunch.

However, the pension authority is struggling to woo clients, said its insiders while referring to data from the first seven months.

Surokkha, with clients of 9,843, topped the board; Pragati is in the next position with 8,454; and Samata is in the third position with 8,013.

Probash, which has been designed for expatriate Bangladeshis amid the crisis of dollars for the past two years, has attracted the lowest number of clients at 541.

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