Bangladesh’s landmark universal pension: a safety net amid economic hopes and fears

Bangladesh introduced its inaugural universal pension scheme, aiming to provide a safety net for millions.

This move allows Bangladeshi citizens to contribute between 1,000 takas (approximately US$14) and 10,000 takas (about US$91) monthly.

Prime Minister Sheikh Hasina announced the scheme, with the government pledging to supplement the pension for lower-income groups.

The scheme aims to cover private sector employees and those in the informal sector, which, according to the International Labor Organization, represented 87% of the working population in 2010.

Previously, only government officials or those who fought for the country’s independence received a state pension.

Vulnerable groups such as widows and disabled individuals also had access to government aid.

Economists’ opinions on the new scheme are divided.

While many acknowledge the importance of universal retirement benefits for a developing nation like Bangladesh, concerns have been raised about the program’s swift implementation without ample preparation.

Ahsan H. Mansur, executive director of the independent Policy Research Institute, stated that while the idea benefits long-term plans, it seems the government rushed its execution, possibly due to upcoming general elections.

Furthermore, concerns have emerged regarding the scheme’s clear investment plan, which is crucial for citizens’ confidence in depositing a portion of their earnings.

Professor Rashed Al Mahmud Titumir from the University of Dhaka mentioned the need for secure investment avenues.

Bangladesh’s Pension Management Authority Secretary, Golam Mostafa, confirmed that an official plan for fund management would be disclosed soon, ensuring no misuse of the funds.

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