Universal Pension Scheme rollout expected next fiscal year

The Universal Pension Scheme is set to roll out in the fiscal year 2023-24.

During the presentation of the budget before the Jatiya Sangsad, Finance Minister AHM Mustafa Kamal said the "Universal Pension Management Act, 2023" had already been passed by the Parliament, paving the way for the scheme to come into practice.

Under the proposed scheme, a beneficiary can enjoy pension benefits subject to the payment of subscription up to the age of 60 years if they enrol at the age between 18-50 years, whereas those who enrol after 50 have to pay a subscription for a minimum of 10 years. 

Expatriate Bangladeshis will also be able to participate in this scheme. 

If the pensioner dies before attaining the age of 75 years while on pension, the nominee of the pensioner will be entitled to the pension for the remaining period of the pensioner's completion of 75 years. 

If the subscriber dies before paying the subscription for at least 10 years, the deposited money will be returned to the nominee along with the profit. 

A maximum of 50% of the deposited amount can be withdrawn as loan by the subscriber by submitting an application. 

Contributions to the pension fund will be treated as investment and tax rebate can be availed against it. 

Besides, the amount received as a monthly pension will be exempted from income tax. 

The finance minister termed the introduction of the Universal Pension System a very significant initiative for the prime minister's inclusive development strategy. 

A pension authority will be established very soon and will be activated through appointment of necessary manpower.

The government is also set to launch a pilot programme for a universal pension system this July with separate products for expatriates, private sector employees, those engaged in the informal sector, and individuals covered by the social safety net.

The initiative is aimed at bringing people from all walks of life under pension coverage in a gradual process. 

The idea of introducing a pension system in the private sector was first discussed by then finance minister Abul Maal Abdul Muhith in April 2014 during a pre-budget meeting with representatives of non-governmental organisations.

In his budget speech in June of that year, he announced the launch of a pilot project to introduce a pension scheme for employees of private banks and corporate organisations in 2018.

He also announced the introduction of a universal pension system in 2021.