Take steps to roll out universal pension scheme

The government should take specific steps through the upcoming national budget for 2022-23 to roll out a universal pension scheme, said an economist. 

In January, the parliament passed Universal Pension Management Bill-2022 with a view to bringing the country's growing elderly population under a social security system.

"The plan is still on paper. We have yet to see any execution," Bazlul Haque Khondker, a former professor of the University of Dhaka, told The Daily Star in an interview on Wednesday.

The scheme, later renamed as "National Pension Management Act-2023", is expected to allow the elderly population to better cope with fallouts of unemployment, disease, disability, old-age complications or extreme poverty.

All citizens aged between 18 years and 50 years based on their national identity card, including expatriate Bangladeshis, will qualify for the benefit, according to the act.

Currently, only employees of government, semi-government or autonomous organisations in Bangladesh receive pension benefits.

As the country is moving towards having a bigger number of aging people, the government should not waste time to move to the next step and to ensure allocations from the upcoming budget, he said.

Khondker went on to say that the government formulated the act in line with National Social Security System (NSSS).

The NSSS is a long-term roadmap developed in 2015 for poverty reduction through the reformation of the country's social security structure building upon the existing network of diverse social security programmes.

But the government has to work soon to formulate the act's structural framework and action plan, said Khondker, who is also the chairman of the South Asian Network on Economic Modeling (SANEM), an independent think tank.

Besides, he also stressed on the implementation of the NSSS, which includes a lot of aspects apart from pensions, through the allocation of adequate money in every budget.

"The implementation rate of the declared NSSS is very slow according to its roadmap," he said.

"If the government could implement the roadmap properly, many people would get the scope to come under the social protection systems," he said.

Apart from this, the economist also urged the government to ensure proper selection of beneficiaries across the country.

"Currently the government has 141 social safety net programmes. In the beneficiary selection process, there are many loopholes," said Khondker.

He said the criteria used for beneficiary selection for social security programmes need complete overhauling.

Provisions are also needed for automatic periodic updates of beneficiaries in line with social and economic development, he said.

He also criticised the government for failing to properly implement a National Household Database (NHD) project.

Initially known as Bangladesh Poverty Database, the NHD project was meant to help streamline the beneficiary selection process for social safety net programmes by gathering socioeconomic data of each household in the country.

It was implemented by the Bangladesh Bureau of Statistics with support from World Bank in 2013.

"Almost after a decade of the NSSS approval, the country could not yet establish a single registry system and install a robust management information system," said Khondker.

"We don't know what the fate of the NHD is. Even if it is now made available, the database has lost its relevance due to demographic transition or dynamism and large income growth," he said.

Moreover, the criteria for beneficiary selection, which were prepared in 2013, are still in use – raising questions over their usefulness as they lack dynamism and adaptability, he said.

According to a survey of the Centre for Policy Dialogue (CPD), around 65.6 per cent of the country's households that receive financial assistance under the government's social safety net programmeswere ineligible for the scheme as they belong to the non-poor category.

"We should not entertain any of the false beneficiaries, rather the government should seriously consider the selection errors," he said.

Since the NHD is not functional, the government must look for alternative beneficiary selection approaches, he suggested.

Once the system is developed and comprehensive social and beneficiary registries are in place, the government may go for deciding on the allowance amountand coverage of the social security programmes, he said.