A new scheme named “Prottoy” will be introduced under Universal Pension for newly recruited employees, according to a notification issued by the regulations wing of the Finance Division on Thursday (14 March).
The government has decided that all employees of state-owned and autonomous institutions hired after 1 July this year will be included in the universal pension scheme.
A new scheme named “Prottoy” will be introduced under Universal Pension for newly recruited employees, according to a notification issued by the regulations wing of the Finance Division on Thursday (14 March).
Those who are currently working in these institutions can also join this scheme subject to at least 10 years of service, said the notification.
The employing organisation will deduct a maximum of 10% of the basic salary of an employee or a maximum of Tk5,000, whichever is less than the salary, and the organisation will also deposit the same amount in the employee’s account. If the employee wishes, they can increase the subscription rate and pay it personally.
Employers will get a monthly pension if they contribute for at least 10 years continuously. And if they subscribe for less than 10 years, they will get a one-time refund with profit.
If an employee contributes Tk10,000 per month for 42 years, they will get a pension of Tk3,44,655 per month. And if someone contributes for 10 years, the monthly pension will be Tk15,302.
This is the first time the government has made it mandatory for any institution to join the public pension system.
Currently, autonomous or statutory bodies, and state-owned companies without pension provisions have the Contributory Provident Fund (CPF). Employees contribute 10% of their basic salary, while the company contributes 8.33%.
From this fund, employees receive retirement benefits. Additionally, employees receive an annual gratuity equal to two months of basic salary, mainly funded by the government budget.
Fahmida Khatun, executive director of the Center for Policy Dialogue, said the decision is a positive move. However, it is crucial to swiftly extend the same system to government job appointees.
She said government employees should be enrolled in the system to bridge the benefits gap with their counterparts in corporations or semi-government organisations.
Mahbub Ahmed, former senior secretary of the finance division, said there are dual benefits in the decision- reduction in government pension expenditure and enlarging the pension fund.
He proposed civil society representation in pension authority boards and the establishment of district-level pension offices to enhance scheme accessibility.
Who will be included
As a result of this decision, public universities and cadet colleges, corporations, all types of authorities including Bida, Beza, government banks, education boards, state-owned companies, all types of institutes including rice research institutes, power development board , various types of boards including water development board, institutions like Petrobangla, Wasa, all types of commissions including telecommunication regulatory commission, all types of councils, all types of ports are included in the universal pension system.
Universal Pension Scheme now
The government initiated four universal pension schemes – Progoti, Surokkha, Somota and Probash – on 17 August 2023, to enrol 10 crore people in the pension system.
As of 2 March this year, 21,095 people have registered, with a total deposit of Tk32.63 crore.
However, finance officials expressed dissatisfaction with public participation and are working to enhance the scheme’s appeal.
According to the Statistics of Government Employees-2022, there are 19 lakh positions across various ministries, divisions, and autonomous bodies, with around 14 lakh working employees.
Notably, there are 4,15,341 positions in autonomous bodies and corporations, with 2,57,522 working staff members.
There is an allocation of Tk32,869 crore for government employee pensions and gratuities in the current fiscal year.
