UNIVERSAL PENSION SCHEME
Civil service pension scheme needs to be reformed
40pc elderly people receive allowance: CPD
STAFF REPORTER, Dhaka
The government should be very careful about the contents of the universal pension scheme before launching it because it would be very difficult to reform or to revise it after implementation, cautioned Dr Zahid Hussain, lead economist of the World Bank (WB), Bangladesh yesterday.
Hussain explained that to introduce a universal pension scheme, the existing civil service pension scheme and revenue market should be reformed. Besides, a private pension market should be set up, revenue mobility should be enhanced, and pension should be made mandatory for the formal sector, he noted.
Adequacy, affordability, and sustainability are very important for a pension scheme. To ensure these, legal reforms and institutional abilities should be looked into very carefully, he added.
Prof. Mustafizur Rahman, executive director of the Centre for Policy Dialogue (CPD), shared international experiences based on the universal pension scheme models of ILO, India and some other countries.
Rahman urged for institutional, legal, and policy reforms and a reformed financial framework to meet the challenges of introducing a universal pension scheme in Bangladesh.
There is no universal pension scheme in Bangladesh. There is a modest old age allowance (OAA), which was introduced in 1998. At present, 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.
The experts came up with the suggestions at a discussion titled Introducing Universal Pension Scheme in Bangladesh: In Search of A Framework organised by CPD at a hotel in the capital yesterday.
Dr Debapriya Bhattacharya, distinguished fellow of CPD, said: Bangladeshs economy is slowly getting stronger. In this situation, the time has come for the creation of a universal pension scheme to ensure economic security for all citizens of the country.
As the universal pension scheme is for the welfare of all people, it is the responsibility of the government to implement it. The government as well as the private sector and citizens have to come forward to make Bangladesh a welfare state, he added.
CPD recommended enacting a universal pension law to provide retirement allowance at a flat rate to citizens aged 65 years and above akin to countries like India, Nepal, Myanmar, and Maldives.
CPD also suggested providing around 20 per cent more of the average wage as retirement allowance to elder citizens.
Mentioning the governments efforts to support senior citizens, planning minister MA Mannan said: We are doing everything for the well-being of our country. Both public and private initiatives are needed to introduce a universal pension scheme.
The minister also said the amount of pension should not be set too high. We cant set the amount of pension so high that everyone stays home without productive work and their contributions to the national economy decline, he added.
We should observe how other middle income countries deal with universal pension scheme. Our main goal is to eradicate poverty and to ensure economic security, which is also goals of SDG, he noted.
According to CPD data, 40 per cent of the people aged 65 years or above do not receive pension.
In his discussion, Abul Kalam Azad, MP and president of the Parliamentary Standing Committee on the Ministry of Planning, said old age pension programme is essential for social security. Old people are dependent on others, but they had made great contributions to society in the past.
Now its high time to launch a public pension scheme for the citizens of Bangladesh, he added.
