Govt employees may be brought under Prottoy scheme of Universal Pension

• Govt employees might be included in the Prottoy scheme
• Announcement expected during the budget speech
• The scheme currently covers employees of autonomous, state-owned orgs
• The scheme involves deduction of 10% of basic salary or Tk5,000
• Both employer and employee contribute the same amount
• The inclusion might help reduce govt's pension expenditure

The government is likely to announce the mandatory inclusion of government employees in the Universal Pension Scheme's Prottoy scheme during the budget speech for the upcoming fiscal year, according to Finance Division officials.

At a meeting with the prime minister on 13 May to discuss the proposed budget for FY25, the Finance Division presented a PowerPoint presentation, outlining the plan to include government employees in the Universal Pension Scheme, several officials of the division have said.

During the meeting, the Finance Division mentioned that the Prottoy scheme has recently been introduced for employees working in autonomous, state-owned, and other statutory organisations, along with their subordinates. There are plans to include government employees in the scheme in the future, they added.

However, there might not be a specific announcement regarding the recruitment time frame of government employees required for compulsory inclusion in the pension scheme, a Finance Division official told The Business Standard on condition of anonymity.

A recent notification issued by the regulations wing of the Finance Division stipulates that employees of autonomous, state-owned, and other statutory organisations, along with their subordinates, who commence their employment on or after 1 July 2014, will be mandatorily enrolled in the Prottoy scheme.

Under the scheme, the employing organisation will deduct a maximum of 10% of the employee's basic salary or a maximum of Tk5,000, whichever is lower, and will deposit the same amount into the employee's account. Both contributions will be credited to the corpus account of government employees managed by the Universal Pension Authority.

Finance Division officials suggest that if government employees are included in the scheme, the same rule may apply to them. This measure is expected to reduce the government's pension expenditure.

In the current fiscal year's budget, there is an allocation of Tk24,992 crore for pension and gratuity of government employees. Additionally, an allocation of Tk27,414 crore has been made for the pension sector under the social security programme. This brings the total allocation for pension and gratuity in the current fiscal year to Tk52,406 crore.

Employees of autonomous, state-owned, and other statutory organisations, along with their subordinates, receive gratuity benefits instead of pension benefits. However, those newly employed in these institutions from 1 July will have their gratuity benefits cancelled as they will be included in the Prottoy scheme.

On 17 August last year, Prime Minister Sheikh Hasina inaugurated the Universal Pension System, introducing four schemes: Probas, Progoti, Surokkha, and Somota. According to the Finance Division, as of 12 May this year, 158,100 people have been enrolled in these schemes.