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A LACK of interest among people to participate in the universal pension scheme has been there since its introduction about a year ago by the now-deposed Awami League government. The interest appears to have slipped further down and many participants have also stopped paying premiums. According to the National Pension Authority, about 20 per cent of the policyholders have stopped paying premiums, while new enrolments have dropped drastically. When there was a demand for a universal pension scheme primarily from employees in the informal sector, the Awami League government introduced the scheme without proper feasibility studies and as what appeared to be a political gimmick and a source of easy money for the government to borrow from. The absence of fund management plans and lack of universality and pension aspects in the scheme raised concern from the very beginning. Nearly a year after the introduction of the pension scheme, the national pension authority outlined seven areas, including government treasury bonds, government treasury bills, government securities, AA-rated scheduled banks, mutual funds for pension fund investment. The pension authority has, however, invested only Tk 125 to buy government treasury bonds. Meanwhile, a feasibility study of the contributory pension scheme undertook by the pension authority, with the technical and financial assistance from the Asian Development Bank, has been put on the back burner. 

The universal pension scheme initially offered four packages — Pragati, Surokkha, Probash and Samata — aimed at ensuring social security for employees in the private sector, the self-employed, expatriates and the poor. But the packages could never become popular — the overall number of policyholders reached 3,72,371 on October 9. The main reason behind the unpopularity of the scheme is, as economists say, the lack of aspects and benefits of a true pension scheme. Three out of four packages are basically contributory packages while only one — Samata, designed for people below the poverty line — has some aspects of a pension scheme. Under the Pragati scheme, meant for private sector employees, employers are required to contribute 50 per cent of their employees’ monthly instalments, and employers have not shown a positive response to the scheme, even though the government tried to sort of coerce them. Self-employed people and the expatriates have also shown little response to the Surokkha and Probash packages, as policyholders under these packages will not receive any contributions from the government. The government introduced another package named Prattay for employees of state-owned autonomous and semi-autonomous bodies and made it mandatory, only to scrap it in face of protests by university teachers on August 3, just two days before the regime change.

The interim government, which has assured that the universal pension scheme will continue, should, therefore, substantially redesign the universal pension scheme to make it popular. In so doing, it should conduct a thorough feasibility study, taking the expectations of the stakeholders into consideration. The government should devise the universal pension scheme in a way that makes it truly universal and accommodates aspects and benefits of pension.