Formulation of a strong pension system is needed to avoid poverty in old age, social misery, and the impact of the gradual abolition of the joint family system.
The introduction of a fully funded pension system with smart policy support and the option of investing in stocks or bonds is necessary for the development of the pension scheme, said speakers at a webinar.
They also mentioned that in the budget speech for the 2019-2020 financial year, the finance minister announced the introduction of the "Universal Pension Scheme" to provide comprehensive pension coverage.
The webinar, styled "Universal Pension System in Bangladesh", was organised by the Institute of Chartered Accountants of Bangladesh (ICAB) on Thursday.
ICAB Council Member Dewan Nurul Islam presided over the webinar attended by Senior Secretary to Finance Division Abdur Rauf Talukder as the chief guest. Bangladesh Energy and Power Research Council Chairman Satyajit Karmakar, and Additional Secretary to Finance Division Golam Mostafa were present as the special guests.
Panel speakers at the webinar were Kavim V Bhatnagar, social protection economist, SPFMSP Project, Finance Division, and Dr Ahsan H Mansoor, executive director, Policy Research Institute of Bangladesh.
ICAB President Mahmudul Hasan Khasru delivered the welcome speech at the webinar, while Suraiya Jannat Khan, lead governance specialist (financial management) of the World Bank, presented the keynote.
In his speech as the chief guest, Abdur Rauf Talukder said a modern and efficient pension management system directly contributes to the better service of government employees.
"As part of its commitment to good governance and efficient service delivery in all areas, the government is committed to modernising the pension payment system. After analysing and surveying the need to modernise the administration of civil service pensions, the finance division under the finance ministry has taken the initiative to consolidate salaries and staff records," he added.
In the budget speech, the finance minister said, "Since government pensioners are a small part of the total population, the government is planning for larger coverage. It has also been suggested that implementing authority was to be set up to gradually introduce universal pensions for all those employed in the formal and informal sectors of the economy.
A universal pension is a payment from the state to an individual that begins when someone retires and payment continues for as long as the recipient is alive.
The keynote at the webinar said, at present, there is no formal pension system in Bangladesh on a national scale except for government jobs. The number of government employees is about 1.4 million, which is only 5% of the total employees employed in both private and government organisations.
According to the Pension Act of 1871, all government employees are entitled to a post-retirement pension. Further simplification of pension rules and procedures for approval and payment of pensions to civil servants was last done on 27 January 2009.