Govt seeks to bring private banking sector under universal pension scheme

Employees of private banks do not receive any form of pension benefit. Consequently, the government wants these employees to come under the Universal Pension Scheme.

To achieve this objective, it has identified a suitable scheme for them, known as the "Progoti" Scheme.

This issue emerged during a review meeting held today, Wednesday, at the Secretariat in Dhaka. Nazma Mobarek, secretary of the Financial Institutions Division of the Ministry of Finance, chaired the meeting.

Representatives from Bangladesh Bank and Managing Directors (MDs) of various banks attended the session.

Mohammad Suratuzzaman, executive chairman of the National Pension Authority, presented the keynote paper, while Ayesha Haque, assistant general manager of the National Pension Authority, moderated the event.

In a press release, the ministry of finance stated that the meeting called upon the banking sector to contribute towards achieving the government's target of bringing at least one member from approximately 40 million (4 crore) families under the Universal Pension Scheme by 2030.

The meeting also decided that managing directors of banks would take the necessary measures to enrol their respective employees in the Progoti Scheme.

Addressing the meeting, Financial Institutions Division Secretary Nazma Mobarek said, "All branches of state-owned banks must establish dedicated desks for the Universal Pension Scheme. In addition, banks should display banners, incorporate the scheme into their own promotional activities, and take the necessary initiatives to bring all employees of private banks under the Progoti Scheme."

The incumbent government's election manifesto includes a commitment under the section titled “Equitable Socio-Economic Development and Sustainable State Capacity” to establish pension funds that will ensure financial security during old age for individuals employed in the private sector.

Referring to this commitment, the paper noted that a significant proportion of the country's approximately 18 million (1.8 crore) registered workers and employees in the private sector lack any form of post-retirement financial security.

While government employees receive pension benefits, no comparable institutional arrangement exists in the private sector.

The paper argued that the Progoti Scheme, introduced under the Universal Pension System in 2023, offers an effective and sustainable solution to address this gap for private-sector employees.

The meeting also discussed several measures to make the Progoti Scheme more attractive.

These included introducing a Shariah-compliant pension scheme, considering lifelong pension benefits for nominees, and extending the scheme to outsourced employees working in banks.

Presenting the features of the Progoti Scheme, officials stated that it had been specifically designed for owners and employees of private-sector institutions.

Under the scheme, employees and employers each contribute 50 per cent of the monthly subscription amount. Monthly contributions range from Tk 1,000 to Tk 15,000. Participants will receive a lifelong monthly pension after retirement.

The scheme also offers income tax rebates on contributions, while pension payments remain exempt from income tax.

After reaching the age of 60, participants may withdraw up to 30 per cent of the accumulated fund as a one-off gratuity payment. The government also guarantees the investments made under the scheme.

Officials presented progress data on the Universal Pension Scheme and reported that, as of 30 May, a total of 377,930 members had registered under the four schemes—Progoti, Probash, Surokkha and Samata.

Total deposits had reached approximately Tk 260 crore and, including profits, had increased to Tk 286 crore.

The National Pension Authority has already signed Memoranda of Understanding (MoUs) with 48 banks and financial institutions. Among them, 24 banks are actively collecting contributions for the pension schemes.

Speaking to Prothom Alo, Mohammad Suratuzzaman, executive chairman of the National Pension Authority said, "Bangladesh Bank and state-owned banks already provide pension benefits. Employees of banks that do not offer pensions will be able to enjoy pension benefits during retirement if they join the Progoti Scheme."

When asked about the number of employees working in private banks, Suratuzzaman said that he had learned the figure exceeds 100,000.