Govt bringing state-owned firms' employees without pensions under Pragati scheme
A wider pension net is coming for state-owned firms' workers
Highlights:
- State-owned firms' employees without govt pensions to join the Pragati scheme
- Universal Pension Fund's maximum return raised to 11.72% for FY26
- Islamic pension scheme approved for introduction
- Nominee age limit raised from 75 to 80 years
- Proposal to allow full withdrawal after five years under review
- Health insurance and pension-backed loans also being considered
The National Pension Authority has decided to bring employees of state-owned companies who are not covered by the government's existing pension system under the "Pragati" scheme of the Universal Pension Scheme.
The authority also approved proposals to introduce an Islamic pension scheme, extend the age limit for nominees to receive pension benefits after a pensioner's death, and set returns of up to 11.72% for the 2025-26 fiscal year.
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The decisions were taken at the fourth meeting of the National Pension Authority Board of Directors today (17 September). Finance Minister Amir Khosru Mahmud Chowdhury chaired the meeting at the ministry's conference room at the Secretariat.
Briefing reporters after the meeting, National Pension Authority Executive Chairman Md Suratuzzaman said that retirement benefits of employees of state-owned companies outside the government's direct pension system depend on their companies' service rules and internal arrangements.
They do not receive state pensions like government civil servants. This is why the initiative to bring them under the Pragati scheme has been taken, he said.
This decision will allow employees of such companies and entities that are not directly covered by the government pension system to join the Universal Pension Scheme.
The full list of eligible companies, the full list, and the implementation process will be determined later, according to sources.
Return rate and Islamic pension scheme
The board today approved a proposal to set the maximum return on the Universal Pension Fund at 11.72% for the 2025-26 fiscal year. The rate was previously 11.68%.
The fund provided a maximum return of 11.61% in FY2024-25.
Suratuzzaman said the authority determined the new return rate after considering the pension fund's investments, income, and expenditure.
The board also approved the proposal to introduce an Islamic pension system under the Universal Pension Scheme. The authority will formulate separate regulations for this new system, Suratuzzaman said.
The Asian Development Bank and local consulting firms are working on the initiative, he said.
Pension from 55 and nominee age raised
The authority will finalise a proposal to allow beneficiaries to receive pension benefits from age 55 after consulting actuaries.
Suratuzzaman said they are also considering retirement and pension systems in other countries, and cited examples of Spain and the United Kingdom where pension benefits begin at age 67 and 66, respectively.
As life expectancy in Bangladesh is increasing, the authority will review the proposal based on financial and demographic considerations, he added.
The authority has also decided to raise the age limit for nominees to receive pension benefits after a pensioner's death from 75 to 80 years.
Suratuzzaman said the pensioner's spouse would receive the benefit until the pensioner reaches age 80.
Withdrawal after 5 years proposed
The authority also discussed a proposal to allow participants to withdraw their entire deposited amount and leave the pension programme after five years of enrolment.
No final decision has been made. The authority would examine the proposal further, said Suratuzzaman.
The board also did not decide on a proposal to provide loans to participants from the pension fund. The authority will review the proposal further and assess whether such a facility could financially disadvantage participants, he said.
The loan interest rate would be determined based on actuarial advice, he added.
Health insurance under review
The National Pension Authority will also review the possibility of introducing health insurance alongside the pension programme.
It will analyse potential insurance models and their financial impact and risks to the pension fund before making a decision, Suratuzzaman said.
The authority has not yet decided whether to adjust pension returns in line with inflation. It will consider the issue when the pension fund becomes larger, he added.
Other decisions
The government plans to provide workers with information about the Universal Pension Scheme before they leave Bangladesh for overseas employment, in order to increase participation among expatriate Bangladeshis.
The Ministry of Expatriates' Welfare and Overseas Employment will work on the initiative, Suratuzzaman said.
The National Pension Authority board also decided to raise the one-time fee for mobile financial service companies participating in the pension programme from Tk15 to Tk25.
The pension fund will also be audited by a private chartered accountant firm, he said.
