Universal pension system for private sector under study

A universal pension system for the private sector is now under study at the ministry of finance (MoF), according to official sources.

If introduced, a private individual will be entitled to certain amount of money as pension every month under the system that will be contributory in nature.

However, the pension amount will be the same for all eligible persons.

Finance Minister AMA Muhith is expected to mention the pension system in his budget speech, expected to be delivered in national parliament (Jatiya Sangsad) in the first week of next month.

Everyone will have to make his/her contribution regularly to receive pension afterwards.

However, the poor will not be required to contribute for receiving such pension.

In this case, the category of poor will be determined on the basis of their calorie intake.

The poor would not have to contribute, but they will receive an equal amount of money as pension like others, according to a senior finance ministry official.

Presently, the public sector pensioners get varying amount of money as monthly pension.

The pension amount of government servants is decided according to their respective compensation packages at the time of retirement and age.

Mr Muhith said though an outline will be given in the upcoming budget, the implementation of universal pension system will take time.

According to finance ministry officials, presently only 1.5 million public sector job holders are under the government pension system.

This segment accounts for only 5.0 per cent of the working population of the country.

The rest of the people, who work in the private sector, are out of the purview of any pension system.

After retirement, most of them do not have any regular source of income.

These people are considered a burden to their family members.

The officials said the government wants to introduce the universal pension system to help the people belonging to this segment.

In the private sector, a handful of companies have introduced provident funds for their employees.

On retirement, these people, usually, get a small amount of money at a time from the provident fund.

But they do not get any pension on monthly basis.

Finance ministry officials said after outlining the universal pension system, the government will invite the corporate houses to introduce the contributory pension system.

The employees will contribute a certain portion of their basic salary while the employers will deposit a matching amount to the pension fund.

When the employees will go on retirement, the entire money will be deposited with the account of 'national pension authority', to be formed by the government.

The authority will invest the funds in various profit-generating economic activities.

Pensioners will get a monthly payment as pension from the amount of profit earned.

Another official said the universal pension system will ensure social security for all, which the government alone cannot finance from its limited resources.

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