Expats will also enjoy universal pension benefits

The finance ministry has drafted a law with a provision of making contributions on a monthly and quarterly basis as well as in advance and instalments for a universal pension scheme.

Citizens, aged between 18 and 50, will be able to enrol in the scheme using their national identification numbers. Even Bangladeshis working abroad can be included in the programme. Public, private, semi-government and autonomous organisations can also join the scheme, it said.

After inclusion in the scheme, a contributor will be eligible for a monthly pension after making their contributions for at least 10 consecutive years. The pension will be paid against their deposits with profits from the pension fund on completion of 60 years of age of the contributors, the draft added.

The ministry has published the draft of the "National Pension Authority Act, 2022" on its website and sought public opinion on it by 12 April.

It said the National Pension Authority would be constituted with an executive chairman and four members. It will determine the minimum monthly subscription for the pension.

The draft law states that from the age of 60, pensioners will enjoy lifelong pension benefits. However, if a pensioner dies before the age of 75, their nominees will receive a monthly pension for the remaining period – up to 75 years of age of the original pensioners.

In addition, if a person dies before completing their constitutions for at least 10 years, the money deposited will be returned to their nominees along with the profits.

There will be no scope for one-time withdrawal of money deposited in the pension fund at any stage. However, the contributor will be able to receive a maximum of 50% of their deposits as loans, which must be repaid along with the prescribed fees. The full amount paid along with the fees will be credited to the pensioners' accounts.

The government will give a tax rebate considering the contribution for pension as investments. The money received by the pensioner as a monthly pension will also be income tax-free.

The government will be able to provide a portion of the monthly contribution to the pension fund as a grant to the citizens below the lower income age or the needy contributors.

"Employees working in government, semi-government and autonomous organisations will be excluded from the universal pension system until the government issued a separate gazette notification," it said.

However, government, semi-government or autonomous or non-government organisations can participate in the universal pension system. In this case, the National Pension Authority will determine their contributions.

The draft law states that there will be a separate pension account for each contributor. Even if an employee changes the job, the previous account will be transferred to the area of their new workplace. Joining a new organisation will not require a new account.

In case of a delayed payment of monthly contributions, the pension account can be kept active by paying the dues along with late fees. The money paid as late fees will also be credited to the contributors' accounts.

According to the draft, the National Pension Authority will undertake the pension scheme, decide its eligibility, supervise and manage the accumulated deposits of the pension fund and ensure the protection of the money deposited by contributors.

The draft law calls for the formation of a 15-member governing board with the finance minister as chairman, with secretaries of the ministries and departments concerned, including the governor of the Bangladesh Bank.

The board will approve specific guidelines and provide the necessary advice to the National Scheme Authority for investing the pension fund in government securities, other low-risk securities and profitable infrastructures.