Universal pension scheme after prior scrutiny and reform

Dhaka, Nov 06 – If a universal pension scheme is launched once, it is very difficult to reform or to revise it. So, the government should be very careful about its contents before introducing the scheme, Dr Zahid Hussain, lead economist of World Bank, Bangladesh said. “Adequacy, affordability and sustainability are very important for a pension scheme. To ensure these, legal reform and institutional ability should be looked into very carefully,” he added.
“To introduce a universal pension scheme, our existing civil service pension scheme, revenue market should be reformed, a private pension market should be set up, revenue mobility should be enhanced and pension should be mandatory foe formal sector,” he noted.
Professor Mustafizur Rahman, executive director of CPD, expressed international experiences based on ILO, India and some other countries model on a universal pension scheme. He also defined four specific pillars to introduce a universal pension scheme in Bangladesh.
“There is no universal pension scheme in Bangladesh. There is a modest Old Age Allowance (OAA) which introduced in 1998. Currently, 39.9 per cent elderly people receive OAA, 7.6 per cent get government retirement pension and about 10 per cent private sector employees receive some kind of gratuity or provident fund,” he added.
Mr Rahman urged for institutional, legal and policy reform and a reformed financial framework to meet the challenge of introducing a universal pension scheme in Bangladesh.
They made the remarks at a discussion titled, “Introducing Universal Pension Scheme in Bangladesh: In a Search of Framework” organised by Centre for Policy Dialogue (CPD), a think tank, at a hotel in the capital yesterday.
Dr Debapriya Bhattacharya, distinguished fellow of CPD said, “Bangladesh’s economy is slowly getting stronger. In this situation, the time has come for the creation of a universal pension scheme to create economic security for all citizens of the country.”
“As a universal pension scheme is for the welfare of all the people of society, it is the responsibility of the government to implement it. The government, as well as the private sectors and citizens, have to come forward to make Bangladesh as a welfare state,” he added.
CPD recommended enacting universal pension law to provide retirement allowance at a flat rate to citizens aged 65 and above akin to countries like India, Nepal, Myanmar and Maldives.
CPD then suggested providing around 20 per cent more of the average wage as a retirement allowance to the elder citizen.
Mentioning the government effort for supporting senior citizens of the country, Planning Minister MA Mannan urged to come forward everyone in this matter.
“We are doing everything for the wellbeing of our country. Both public and private initiatives are needed to introduce a universal pension scheme,” he added.
He also said the amount of pension should not be set too high. “We can’t set the amount of pension so high that everyone stays home without productive work and their contribution to the national economic decline,” he said.
“We should observe how other middle-income countries deal with a universal pension scheme. The main goal of us to eradicate poverty and to ensure economic security, which is also goals of SDG,” he added.
According to CPD research, 40 per cent of the public who are aged 65 or above do not receive pension.
In his discussion, Abul Kalam Azad, MP, President of Parliamentary Standing Committee on Ministry of Planning, said old-age pension programme is essential for social security. Old people are dependent on others but they have put a large contribution to society once.
“Now it is high time to launch a ‘Public Pension Scheme’ for the citizens of Bangladesh,” He said. – Staff Reporter