Universal Pension Scheme: Nominees to receive pensions until age 80

Under the Universal Pension Scheme, the age limit for a pensioner’s spouse or nominee to receive pension benefits after the pensioner’s death will be raised from 75 to 80. Also, a Shariah-based pension scheme will be introduced.

In addition, employees of state-owned companies that do not provide pensions will be brought under the ‘Progoti’ scheme. Which organisations’ employees will be covered and how this will be implemented will be decided later.

National Pension Authority Executive Chairman Md Suratuzzaman disclosed this information after a meeting of the authority’s board of directors at the Secretariat today, Thursday. Finance and Planning Minister Amir Khosru Mahmud Chowdhury chaired the meeting.

After the meeting, Md Suratuzzaman said the pensioner would receive a pension for life. After their death, their spouse would receive pension benefits until the age of 80. Previously, the age limit for this benefit was 75.

Md Suratuzzaman said separate pension and gratuity arrangements were in place for government employees. However, many employees of state-owned companies were outside this system. An initiative was being taken to bring them under the Universal Pension Scheme.

In addition, steps had been taken to inform employees about the ‘Probash’ scheme and provide them with an opportunity to register before travelling abroad, he added.

The board of directors approved a proposal to introduce an Islamic or Shariah-based version of the Universal Pension Programme. Md Suratuzzaman said the Asian Development Bank (ADB) and local consultants were working to determine the scheme’s structure and operating procedures.

The Shariah-based scheme would be introduced after the necessary work, including actuarial analysis, was completed and separate regulations were formulated, he added.

It was reported that although a proposal to lower the pension age from 60 to 55 had been discussed, no final decision was made at the meeting. The matter could be presented to the board of directors again later after obtaining actuarial advice.

The current pension eligibility age is 60. Citing examples, Md Suratuzzaman said the pension age in various countries was 62, 66 or 67. Life expectancy was also increasing in Bangladesh. Therefore, the proposal to provide pensions from the age of 55 would be reviewed in light of financial and demographic realities.

The possibility of providing loans to participants from the Universal Pension Fund was also discussed. However, no final decision was made on the matter. If loans were provided, a decision would be taken based on actuarial guidelines, considering how to ensure the fund’s desired returns and prevent participants from being adversely affected.

The introduction of health insurance alongside the pension programme is also being reviewed. A decision will be made after analysing which model should be introduced and what financial risks it could create for the fund. No decision has yet been made on providing returns adjusted for inflation.

Under the existing pension system, once someone joined a scheme, they had no opportunity to leave it. If they were unable to continue, the money they had deposited would be lost. Participants had demanded changes to this rule. A proposal to amend the rule was included in the meeting’s agenda.

Although the possibility of allowing pension subscribers to withdraw their money under special consideration if they became physically or financially incapable after contributing for five years was discussed, the proposal was not approved at the meeting.

To increase new registrations under the Universal Pension Scheme, incentives for relevant institutions, including Union Digital Centres, mobile financial services and banks, have been increased. Previously, Tk 15 was provided for each registration, but this has now been raised to Tk 25.

In addition, it was decided that, alongside government audits, a private chartered accountancy firm would conduct an audit to make the National Pension Authority’s financial activities more transparent.