Universal pension scheme in 6 months or a year: Finance minister

Bangladesh is going to roll out the much-anticipated universal pension scheme within the next six months or a year, said Finance Minister AHM Mustafa Kamal. 

"The government will provide the same amount deposited by marginalised people under the scheme," he briefed reporters, after the meeting of the Cabinet Committee on Public Purchase, on Wednesday.  

The minister said the government already framed several basic policies for the universal pension scheme. "The process of formulating a law in this regard is underway and necessary changes will be made later." 

Although the enrolment in the scheme will be kept optional initially, it will be made mandatory for eligible citizens later, he added.

Prime Minister Sheikh Hasina is expected to announce the details of the pension scheme on Saturday.

Terming the proposed scheme a  "history", the minister believes the initiative of taking responsibility for the old-age people by the government would be an outstanding achievement of the country. "All will be benefited." 

Citizens aged between 18 and 50, excluding staffers of government and autonomous organisations, will be able to enrol in the scheme using their national identification numbers. They will become eligible for monthly pension after reaching 60 years of age, on the condition of a 10-year regular deposit. 

Separate accounts will be maintained for individuals, which is why there will be no impact in case of changes in their professions or jobs, he briefed. 

Apart from individuals, institutions also can enrol in the scheme, the finance minister said, adding that the option of quarterly payment will also be kept considering the convenience of expatriate Bangladeshis. 

 Mustafa Kamal said none will be allowed a one-off withdrawal of their money from the scheme. However, they can take up to 50% of their deposited money as loans. 

In case of deaths before completion of the 10-year deposit, they will be returned their money with interest. Besides, the deposited money will be exempt from tax. 

"Currently, the average longevity is 73 years. It is expected to increase to 80 years in 2050 and 85 years in 2075. The calculation says people will get 20 years longevity after their retirement then," said the finance minister, adding that the ratio of dependent people can increase to 24% in 2050 and 48% in 2075 from the existing 7.7%, as well.

"So, the universal pension scheme is very crucial for ensuring social safety of the old-age people," Mustafa Kamal said. 

According to the finance ministry officials, if an individual aged 18 or above deposits Tk1,000 per month, the savings will be around Tk5 lakh when they turn 60. 

But the 60-year-old citizen will be receiving Tk60,000 per month as pension until death.

The government will invest the pension fund in treasury bills, bonds and infrastructural development projects, and pay a 10% interest on it.