They advised the government to finalize a law examining in detail the ability of Bangladeshi citizens to make deposits into the scheme fund.
“The universal pension is a wonderful concept developed for a welfare state. The idea needs to be implemented,” said Mohammed Farashuddin, former governor of Bangladesh Bank.
He said the government should not rush the implementation of the program because of the technical issues involved in the plan. “So it probably needs to be handled by experts and the project [plan] must be examined. »
The ability of people in the lower and middle classes to regularly contribute funds to the program is very low, he said. “The issue of funding is important. You have to think about it deeply. »
Suraiya Zannath, senior financial management specialist at the World Bank, said the government should proceed with caution as the program will include people from all walks of life. “All decisions must be made carefully to attract people to the program.”
The Awami League promised to introduce universal retirement in Bangladesh in its manifesto for the 11th parliamentary election. Prime Minister Sheikh Hasina recently ordered officials to take steps to launch the program.
The government on March 30 published a bill on a national pension authority, aimed at introducing pension benefits for all. Citizens can give their opinion on the bill until April 12.
According to the draft, all active citizens between the ages of 18 and 50 will be entitled to receive the pension benefit.
A person will become eligible to receive a monthly pension if they pay fees for at least 10 consecutive years. There will be a pension account for each citizen. The account will remain unchanged even if a person changes profession. The minimum monthly fee will be fixed. However, in the case of expatriates, there will be an option to pay on a quarterly basis.
The beneficiary must ensure the annual deposit. Otherwise, the account will be temporarily suspended. It can be reactivated later by paying the contribution and a late payment penalty.
The pension will be granted at the prescribed rate against the deposit with accrued dividends once the specified age, which is 60, for the pension is reached. A person will then receive an annuity every month until death.
Bangladeshis working abroad will also be able to attend. However, employees of government and self-governing organizations will be considered later as they are currently covered by the government pension scheme.
But the draft does not mention how beneficiaries of the social safety net for the elderly, the disabled, widows or freedom fighters will be included in the pension scheme.
“Some pension schemes already exist in Bangladesh,” Suraiya said, referring to those schemes. Since all pension or social security programs are implemented by different ministries or departments, they can be integrated into the fund management framework of the new pension authority. “It will have an institutional structure.”
“Then it will be more beneficial. This will ensure the continuity of the universal pension system and make it more sustainable and productive.
According to the draft law, in consultation with the government, the authority may set up the required number of counters or may establish or hire and manage pensioner assistance agencies.
Regular banks and field offices of the Postal Service and any other government or private institution, as required by law, will act as the cash desk of the pension scheme.
Suraiya advised the government to follow expert advice and global best practices to finalize the rules.
“A concept paper was created initially, which is good. Now it’s about activating different organizations. We need to think about how this will be done. The government will have to go a long way to move forward. »