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The government has decided to introduce several changes to make the Universal Pension Scheme more attractive. As part of the changes, the age limit for a pensioner’s spouse or nominee to receive pension benefits after the pensioner’s death has been raised from 75 to 80 years.
The National Pension Authority’s board of directors has also decided to bring employees of state-owned companies and institutions who are not covered by the existing government pension system under the ‘Progoti’ scheme of the Universal Pension Scheme. The board also approved a proposal to introduce a Shariah-based or Islamic pension scheme.
The fourth meeting of the National Pension Authority’s board of directors was held on Thursday (September 17) at the conference room of the Finance Ministry at the Secretariat. Finance Minister and board chairman Amir Khosru Mahmud Chowdhury presided over the meeting.
After the meeting, National Pension Authority Executive Chairman Dr Md Suratul Islam told journalists that the board had approved a proposal to set the profit rate on the pension fund for the 2025–26 fiscal year at 11.72%, up from 11.68%.
Dr Suratul Islam said several initiatives had been taken to make the Universal Pension Scheme more attractive. Efforts are also underway to bring back people who initially contributed to the scheme but later stopped making payments for various reasons.
Four schemes are currently operating under the Universal Pension Scheme: Progoti, Surakkha, Samata and Probash. The government plans to bring private-sector employees, people with irregular incomes and expatriate Bangladeshis under the pension system through these schemes.
The Universal Pension Scheme was launched on August 17, 2023, with a target of bringing around 100 million people under its coverage. However, three years after its launch, 379,920 people have registered under the four schemes. Their total deposited amount stands at Tk 2.8852 billion.
Participants have said that the scheme has not attracted people’s expected level of interest because returns are lower than bank deposits and immediate benefits before retirement are limited. Many people who initially contributed have also stopped making payments for various reasons.
Benefits for nominees
Currently, if a pensioner dies, his or her spouse can receive pension benefits until reaching the age of 75. The National Pension Authority had proposed making the benefit available for the nominee’s lifetime. However, the board decided to extend the benefit up to the age of 80.
The meeting also decided to bring employees of state-owned companies who are not covered by the government’s direct pension system under the Progoti scheme.
The retirement benefits of these employees depend on their respective organisations’ service rules and internal arrangements. Unlike government civil servants, they do not receive state pensions or gratuities. However, the full list of eligible companies and institutions and the implementation procedure will be determined later, the chairman said.### Pension fund profit
Dr Suratul Islam said the profit rate was determined after considering the pension fund’s investments as well as its income and expenditure. The board approved a proposal to provide a profit of 11.72% on the Universal Pension Fund for the 2025–26 fiscal year, compared with 11.68% previously.
In the 2024–25 fiscal year, the maximum profit rate was 11.61%.
Islamic pension scheme
The board approved a proposal to introduce an Islamic or Shariah-based pension scheme under the Universal Pension Scheme. Local consulting firms, along with the Asian Development Bank, are working on the initiative.
A separate set of regulations will be formulated for the Islamic pension scheme, the executive chairman said.
Meanwhile, a proposal to reduce the pension eligibility age from the existing 60 years to 55 years is also under review. A final decision will be taken after actuarial consultation, taking pension and retirement systems in other countries into consideration.
Dr Suratul Islam said pension benefits begin at age 67 in Spain and 66 in the United Kingdom. As life expectancy in Bangladesh is increasing, the proposal to provide pensions from age 55 will be reviewed considering the country’s financial and demographic realities.
Other proposals
A proposal was discussed to allow participants to withdraw their entire deposited amount and leave the pension scheme after five years of participation. No final decision was taken, and the proposal will undergo further examination.
According to sources at the meeting, instead of allowing general withdrawals, the authority may consider returning a participant’s money through insurance if the person wants to leave the scheme because of physical disability.
The meeting also discussed providing loans to participants from the Universal Pension Fund. No final decision was made on this proposal either. If loans are introduced, the decision will be based on actuarial guidance, taking into account the need to ensure the fund’s targeted returns and prevent participants from suffering financial losses.
The possibility of introducing health insurance alongside the pension programme will also be reviewed. The authority will analyse which model would be appropriate and what financial impact or risks it could create for the pension fund before making a decision.
A proposal to adjust pension profits in line with inflation is also under consideration, but no decision has been made. The matter may be considered once the pension fund becomes larger.
To increase participation among expatriate Bangladeshis, information about the Universal Pension Scheme will be provided to workers when they leave the country for overseas employment. The Ministry of Expatriates’ Welfare and Overseas Employment will work on the initiative, Dr Suratul Islam said.
The meeting also discussed a proposal to increase the commission paid to Union Digital Centres for registering participants. The current commission is Tk 15, and a proposal has been made to raise it to Tk 25.
The meeting also discussed setting commission rates for banks, the postal department, mobile financial service providers and other authorised institutions.
