The government outlined seven areas for pension fund investment in rules, issued on Sunday, nearly a year after the scheme鈥檚 introduction, which had already sparked protests.
The investment areas include government treasury bonds, government treasury bills, government securities, AA-rated scheduled banks, mutual funds, and 鈥楢鈥� category bonds approved by the Bangladesh Securities Exchange Commission.
Pension funds also can be invested in government-implemented infrastructure projects or the security of such projects as per the new rules.
The rules, issued by the finance division in a gazette, stated that the investment exposure on a single instrument would not exceed 25 per cent, except for government securities.
The rules also prohibited pension fund investment in entities run by private parties and those outside the country.
To manage the funds, an eight-member fund management committee has been empowered to open multiple accounts in state-owned banks. The committee can also open accounts in private banks with AA ratings from credible rating agencies.
Four instruments鈥擯robash, Pragati, Surokkha, and Samata鈥攚ere introduced with the new pension scheme launched in August 2023, aimed at replacing the current one.
Recently, a new instrument, Prattay, was introduced to include newcomers in autonomous and semi-autonomous public bodies, which led to university teachers going on work abstention.
At the scheme鈥檚 launch, former finance minister AHM Mustafa Kamal hoped it would attract many subscribers and help the government tackle the credit crunch.
The pension authority, however, was struggling to woo clients, with insiders noting that overall membership was around 3,32,773 until June.
The government has received approximately Tk 97 crore in contributory payments, of which Tk 93 crore has been invested in treasury bonds.
The government is planning a feasibility study on the pension scheme by the Asian Development Bank under a project funded by the bank.
The proposed three-and-a-half-year project, costing $325 million, aims to strengthen the pension authority鈥檚 transition towards a contributory pension system.
