The universal pension scheme, launched about a year ago to ensure social security for all, faces new challenges as around 20 per cent policyholders have gone dormant.
Besides, new enrolments in the much-talked-about pension schemes have dropped to just 10鈥�20 daily over the past two months from previous 4,000鈥�5,000 a day, said officials at the National Pension Authority.
Difficulty to popularise the pension schemes from the very beginning is not unusual since majority people had to subscribe them amid political pressures, observe economists.
Introduction of the scheme was political gimmicks that failed to earn people鈥檚 confidence, said Mustafa K Mujeri, former director general of the Bangladesh Institute of Development Studies.
The recent regime change has been blamed for the new problems that, according to officials, are not unexpected as these difficulties started arising since then prime minister Sheikh Hasina fled to India on August 5 after ouster in the face a student-led mass uprising.
National Pension Authority member Md Golam Mostafa at his office on Wednesday said that many policyholders felt confused and feared that the new regime might discontinue the pension scheme which led them to stop paying the premiums.
They had yet to calculate the number of dormant policyholders, he added.
Pension authority insiders put the approximate figure at around 15鈥�20 per cent of over 3.72 lakh policyholders.
Golam Mostafa said that they had already contacted dormant policyholders to assure them that pension programme would continue.
The national pension authority has also decided to wait for one year before suspending the dormant policyholders鈥� accounts, he added.
On September 18, the national pension authority, a body under the finance ministry, calculated the total number of policyholders under its four schemes at 3,72,168.
On October 9, the overall number rose to 3,72, 371, showing that only around 10 on average per day joined the schemes over the past 22 days, said its officials.
Former National Board of Revenue chairman Abdul Mazid said that the NPA was聽 a very sensitive issue and a matter of national interest.
But given the country鈥檚 overall situation after the fall of the autocratic regime, the interim government should focus on priority areas such as reforms, he observed.聽聽聽聽聽聽
Pension authority officials said that they had also faced a setback as the newly launched scheme Prottay, in face of protests by university teachers, was scrapped on August 3, just two days before the eventual regime change.
Four instruments鈥擯robash, Pragati, Surokkha, and Samata鈥攚ere introduced in August 2023 for citizens aged between 18 years and 50 years, but they drew criticisms from the economists for, among other factors, being mostly contributory in nature.
The now ousted government was desperate to move towards a contributory pension policy from the so-far non-contributory one to offset the growing burden of pension allocations on the national budget.
Within a period of just 11 years, the allocations for pension and gratuity benefits in the national budget more than tripled鈥攆or FY25 Tk 39,419 crore has been projected that was Tk 11,913 crore in FY14鈥攎ounting pressure on fiscal management by the finance ministry.
Under the initiative, the scheme holders have been projected to receive pension benefits at different rates from the retirement age of 60 years based on their monthly contributions for at least 10 years.
The national pension authority outlined seven areas for pension fund investment, nearly a year after the introduction of the schemes, to overcome a fundamental flaw of the new pension policy launched without any proper feasibility studies due to pressure from former finance minister AHM Mustafa Kamal.
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.
Until September, the NPA only invested around Tk 125 crore of the money to buy government treasury bonds.
Another delayed initiative the pension authority undertook is a feasibility study of the contributory pension scheme. The authority proposed the study to be carried out with the technical and financial assistance from the Asian Development Bank.
With the downfall of the Awami government, the progress in fund negotiations with the ADB had stalled, said officials at the pension authority.
They said that the Manila-based multilateral lender sought the interim government鈥檚 consent to negotiate over the proposed $250 million loan to conduct the feasibility study.
The NPA is hopeful of overcoming the current problems after finance adviser Salehuddin Ahmed gave the green light to continue the pension programme at an introductory meeting with the authority on September 10.
They said that the finance adviser who is the chairman of the NPA board of directors gave consent to hold a board meeting on October 14.
Mustafa K Mujeri, formerly Bangladesh Bank chief economist, said that substantial redesigning of the overall policy was imperative to reflect the expectations of the stakeholders.
