The government has taken an initiative to reduce the suffering of MPO-listed non-government teachers and employees in receiving their retirement and welfare benefits.
For now, authorities have decided to use the funds currently available with the Retirement Benefits Board to provide retirement and welfare payments to several thousand teachers and staff members. Additionally, the government has issued bonds worth Tk 20 billion (2000 crore) for the two relevant institutions.
Officials concerned are also hopeful of receiving budgetary allocations for this sector in the upcoming national budget.
Thousands of retired teachers and employees have been waiting months, often years, for their dues following retirement. Some have even passed away without ever receiving their money, leading to deep frustration and anger within the teaching community.
According to sources at the Ministry of Education, the Retirement Benefits Board currently has around Tk 10.82 billion in deposits, while the Welfare Trust holds approximately Tk 3.5 billion. The total amount of accumulated funds is expected to increase further in the near future.
Sources said a proposal has been made to provide partial retirement benefits of Tk 500,000 each to around 8,000 teachers. So far, however, payments for 3,100 individuals have been prepared following verification.
Meanwhile, the Welfare Trust is ready to provide welfare benefits to around 3,500 teachers and employees, although the final number may change.
More than 600,000 teachers and employees are currently enlisted under the Monthly Pay Order (MPO) system in private educational institutions across Bangladesh. Their retirement and welfare benefits are administered through two separate organisations, the Non-Government Teacher and Employee Welfare Trust and the Non-Government Teacher and Employee Retirement Benefit Board.
Previously based in the BANBEIS building in the Nilkhet-Palashi area, both institutions recently relocated to the Probashi Kallyan Bhaban in Eskaton Garden.
To finance retirement benefits, 6 per cent of a teacher or employee's basic salary is deducted every month during service. An additional 4 per cent is deducted for welfare benefits.
Besides, each student contributes Tk 100 annually, of which Tk 70 goes to the retirement fund and Tk 30 to the welfare fund. The remaining funding comes from government support and interest earned on deposited funds.
Additionally, every student contributes Tk 100 annually to these funds, Tk 70 goes toward retirement benefits and Tk 30 toward welfare. The remaining costs are covered by government subsidies and interest earned on the accumulated deposits.
Despite making these regular contributions throughout their entire professional lives, teachers find themselves unable to withdraw their money when they finally retire.
According to the Retirement Benefits Board, teachers and employees who applied for retirement benefits up to December 2021 have so far received their payments. Since then, nearly 64,000 applicants have submitted claims but are still waiting to receive their money. Applications submitted up to May 2022 are currently undergoing verification.
The waiting period for welfare benefits is somewhat shorter, as the required amount is comparatively lower. Sources at the Welfare Trust said that those who applied up to April 2023 have received their dues. However, as of 24 May, a total of 44,966 applications from teachers and employees remained pending.
The total financial gap is staggering. The Retirement Benefits Board currently faces a deficit of around Tk 75 billion, while the Welfare Trust has a shortfall of approximately Tk 28.13 billion.
Sources at the Ministry of Education said that no new payments could be approved for some time due to the absence of regular governing committees. With new committees now in place, the process has resumed.
For the time being, the government plans to use the funds already available in the two institutions to make retirement and welfare payments. Authorities have set a target of disbursing the funds within the next 15 days.
Meanwhile, the government has already issued bonds worth Tk 18 billion for the Retirement Benefits Board and Tk 2 billion for the Welfare Trust. Earlier, during the tenure of the interim government, bonds worth an additional Tk 22 billion had been provided. Returns from these bonds will be paid every six months.
The government has also taken steps to simplify and automate the retirement benefit disbursement process. An agreement will soon be signed with Bangladesh University of Engineering and Technology (BUET) to develop a new software system, ministry sources said.
Officials hope the software will improve transparency and speed in both the application and payment processes once it becomes operational.