Universal Pension Scheme: How will it work? What‍‍`s in it?

In an effort to bring the elderly under a sustainable social security system, the government of Bangladesh has introduced the Universal Pension Scheme today (August 17, 2023).

According to Finance Ministry sources, there are four schemes under the Universal Pension: Probas, Progoti, Surokkha and Samata. Through the schemes, private sector employees and migrant workers will get pensions ranging from a minimum of 2.30 to 12.31 times their total installments.

People aged between 18-50 can join the Universal Pension Scheme, and those aged 60 and above can avail life term pension facilities. People aged 50 and above can also be included in the scheme, and in that case they will get the pension after providing installments for 10 years.

Registration process

Those who want to enroll in the Universal Pension Scheme should register at first and people aged 18 and above can join the scheme by using their National Identity Card (NID).

How to provide installment

People can pay their monthly installments from home. The authorities concerned have created an app for this. Migrant workers, who do not have NID cards can join the scheme with their valid passports at banking channels, approved mobile banking services, and foreign exchange houses.

After completing registration, a number will be provided through which the installment and other procedures can be done.

In the rural areas, Union Digital Centres will help people with the registration process and there will be no exchange in the scheme. All dealings will be operated online.

The authorities concerned of the Universal Pension Scheme will open an account at the state-owned Sonali Bank and participants will provide their installments each month to the respective account.

Migrant workers can provide installments from abroad while people can also provide installments to the account directly or through Nagad, bKash and mobile financial services.

Progoti scheme for private sector employees

Private sector employees can open the Progoti scheme by providing Tk 2,000, Tk 3,000 and Tk 5,000 installments per month. Fifty percent of the installment will be provided by the employees while the rest will be provided by the companies.

If any private company does not want to join the Universal Pension Scheme, employees can join the scheme on their own.

If any employee joins the scheme at the age of 18 and provides installments of Tk 2,000 per month for 42 years, he/she will be able to get Tk 68,931 as pension per month at the age of 60. During the same period, those who provide Tk 3,000 per month will get Tk 1,03,396 per month, and people who will provide Tk 5,000 installment per month can withdraw Tk 1,72,327 from the scheme per month for life. This means a person who will provide Tk 5,000 installment per month for 42 years will get Tk 3,10,24,800 in total which will be 12.31 percent of the total installments.

Surokkha for informal sector workers

The Surokkha scheme will be applicable for self-employed and informal sector workers. Farmers, rickshaw pullers, day labourers, blacksmiths, potters, fishermen and weavers can enrol under the scheme.

The installments per month under the scheme can be Tk 1,000, Tk 2,000, Tk 3,000 and Tk 5,000. Those who continue the scheme after providing Tk 1,000 per month will get Tk 34,465 as pension per month after 60 years. Besides, those who provide Tk 2,000 per month can withdraw Tk 68,931 per month after 60 years.

People who will provide Tk 3,000 and Tk 5,000 per month would be able to withdraw Tk 1,03,396 and Tk 1,72,327 per month for life as pension, respectively.

Samata for the ultra poor

Under the scheme, the monthly installment would be Tk 1,000 and the customer can provide Tk 500 per month while the rest will be provided by the government. People living below extreme poverty level can avail the opportunity. If any person joins the scheme at the age of 18 and provides Tk 500 installment per month he/she will get Tk 34,465 per month as pension after 60 years. Besides, people over 50 years will get Tk 1,530 per month after providing Tk 500 as installment for ten years.

Probas for migrant workers

For the migrant workers, the government has fixed Tk 5,000, Tk 7,500, Tk 10,000 installment per month under the scheme and if anyone returns to the country before 60 years, he/she can pay the amount through local currency or exchange the scheme.

They will get their pension in local currency after their scheme matures.

If an 18-year-old migrant workers provides Tk 10,000 per month for 42 years, his/her total amount of the installment will be Tk 50.40 lakh and he/she will be able to withdraw Tk 3,44,655 per month after 60 years till 75. The total amount of pension will be Tk 6,20,37,900 which will be 12.31 percent multiple of the total amount.

Under the same scheme, those who provide Tk 5,000 and 7,500 as installment for 42 years, he/she will get Tk 1,72,327 and Tk 2,58,491 per month after 60 years.

Meanwhile, if someone provides Tk 5,000 per month for a minimum of 10 years under this scheme, then he/she will deposit a total of Tk 6 lakh. In return, he/she will get a total pension of Tk 13,77,180 after getting Tk 7,651 per month from the age of 60, which will be 2.30 percent more than the total amount.

Finance Ministry sources said, the National Pension Authority has sent letters to the deputy commissioners of eight districts--Gopalganj, Sylhet, Rangpur, Pabna, Bagerhat, Mymensingh, Rangamati and Barguna--to introduce the pension on the opening day.

The authorities also sent letters to the Bangladesh missions in Jeddah and Kuala Lumpur.

Earlier, in the day, Prime Minister Sheikh Hasina rolled out the much anticipated Universal Pension Scheme, aiming to bring all citizens aged above 18 under the coverage.

She launched the pension scheme, joining virtually from her official residence Ganabhaban. Participants and beneficiaries were connected from three districts -- Gopalganj, Bagerhat and Rangpur -- and the Bangladesh embassy in Saudi Arabia.