A pro-people pension scheme on the way
We are pleased that the government has made good progress with the universal pension scheme it plans to introduce this year. According to a report by The Daily Star, the cabinet on June 20 gave its final approval to the draft of the Universal Pension Management Act, 2022, which is now awaiting a nod from the Legislative Division. Reportedly, people between the ages of 18 and 50 can participate in the pension scheme, including expatriate Bangladeshis. Those participating will have to provide a premium for at least 10 years to get pension from the age of 60 until their death. The amount of premium will be determined by a rule under the proposed law. The law further proposes the establishment of a five-member national pension authority headed by a chairman, and also a 15-member governing body with the finance minister at its helm.
The main target of the scheme is to bring the growing elderly population of the country under a sustainable social safety net programme, which we are badly missing. As the percentage of elderly people is set to increase from 11 percent in 2017 to 20 percent in 2031, it is high time for the government to set up and introduce such a scheme. However, as is the case with nearly every government scheme in Bangladesh, the effectiveness of the scheme is not guaranteed – without checking corruption and mismanagement.
Introducing the scheme may already prove to be a challenge for the government due to its increased expenditure and low revenue collection. The issue of accountability and good governance, no doubt, will again be at the forefront. As such, designing the institutional and legal framework to check any scope for irregularities now, and in the future, will be key. Proper management of this fund will be crucial. Therefore, the government must ensure the maintenance of proper checks and balances, and nurture the technical ability of those who will be handling such a vital task.
While we congratulate the government for planning to introduce this pro-people scheme, ultimately, the people will only benefit from it if the government can ensure full accountability and transparency in its application. We hope the government remains conscious of its poor record when it comes to the implementation phase of such schemes, and works doubly hard to ensure this scheme can avoid those traditional pitfalls.