Universal Pension: Deposit Tk50 lakh over 42 years, get up to Tk6cr back


In addition to ensuring social security and reducing the number of beneficiaries in the social safety programme, the scheme will be of significant advantages to contributors.

09 August, 2023, 10:50 pm

Last modified: 09 August, 2023, 11:15 pm

Illustration: TBS

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Illustration: TBS

Illustration: TBS

The Universal Pension Scheme is set to roll out on 17 August, aiming to establish a sustainable social security system for elderly citizens of private and informal sectors, expatriates, and impoverished people.

In addition to ensuring social security and reducing the number of beneficiaries in the social safety programme, the scheme will be of significant advantages to contributors.

By enrolling in the scheme at 18 years old, private sector employees or expatriates can receive benefits 12 times greater than their 42 years of contribution, documents from the Finance Ministry reveal.

For example, if an expatriate starts contributing Tk10,000 per month under the Probas Scheme, his total contributions to the government would amount to Tk5,040,000 by age 60. With a monthly pension of Tk3,44,655 from age 60 to at least 75, the accumulated sum would reach Tk62,037,900, which is around 12.31 times their total contribution.

On the other hand, under the Progoti Scheme, a private sector employee contributing Tk5,000 per month would amass a total deposit of Tk2,520,000. By age 75, their government pension would amount to Tk31,018,860, representing 12.31 times their total deposit.

Infographics: TBS

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Infographics: TBS

Infographics: TBS

If the pensioner dies before 75, the nominee will receive the pension at the same rate until that age.

Stakeholders say the public pension system will function as a government revenue source as the authority will receive a premium for the initial 10 years. During this period no pension will be paid. The government will invest these funds in profitable ventures.

Additionally, in case of expatriates, premium will be received in foreign currency and pensions will be disbursed in local currency. It will thus bolster the country’s foreign exchange reserves.

Prime Minister Sheikh Hasina is set to launch the Universal Pension Scheme, which will have four categories, on 17 August. Enrolment for the scheme can be done through an online application.

The finance ministry has sent letters to deputy commissioners of eight districts, Pabna, Gopalganj, Khagrachari, Barguna, Sylhet, Bagerhat, Rangpur and Mymensingh, requesting submission of a list of potential candidates and their nominees interested in enrolling in the scheme by 12 August for the inauguration. The list should include NIDs, photos, and registered mobile numbers of the candidates and nominees.

Likewise, letters have been dispatched to Bangladesh embassies in Saudi Arabia, Malaysia, and Singapore, seeking a list of expatriates interested in the scheme.

For the time being, government and employees of autonomous institutions will not qualify for the scheme. Moreover, citizens covered by the social security net cannot be included in the system. However, any beneficiary of the universal safety net can enrol in the universal pension by surrendering this benefit.

Bangladeshi citizens aged 18 and above can join four schemes: “Probas” for expatriates, “Progoti” for private employees, “Surokkha” for informal sector workers, and “Somota” for the impoverished, beginning on the launch day. Individuals over 50 can also enrol, but their pension will begin after a minimum 10 years of contribution.

Upon enrollment in the public pension scheme, participants have the flexibility to modify their contribution amount and chosen scheme.

Finance ministry officials said that all citizens aged 18 and above can join the universal pension scheme using their national identity card. However, expatriate Bangladeshis not having their NIDs can still join by subscribing in foreign currency via banking channels, authorised mobile financial services, and exchange houses, using valid passports.

For all schemes, subscribers can choose monthly, quarterly, or annual instalment payments. Additionally, contributors can make advance deposits into the pension fund, specifying the month, said an official of the ministry.

Probas scheme for expats

The monthly contribution in Probas scheme is fixed at Tk5,000, Tk7,500 and Tk10,000. Any Bangladeshi citizen working or staying abroad can join the scheme by paying any amount of subscription in foreign currency.

After joining the public pension system from abroad, they can pay the contribution in local currency or change the scheme if he returns to the country. The government will pay the pension in local currency to the pensioners of the expatriates on completion of their scheme.

If anyone joins the Probas scheme at the age of 18 and contributes Tk5,000 per month for 42 years, he will get a pension of Tk1,72,372 per month from the age of 60. Expats will get a lifetime pension of Tk2,58,491 per month if they contribute Tk7,500 per month for 42 years and Tk3,44,655 per month if they contribute Tk10,000 per month. 

Infographics: TBS

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Infographics: TBS

Infographics: TBS

Progoti scheme for private employees

Private employees can participate in the Progoti  scheme by paying a monthly subscription amount of Tk2,000, Tk3,000 and Tk5,000.

For a company’s subscription, 50% of the scheme contribution could be covered by the employee, with the remaining 50% by the company. Even if a private organisation does not engage institutionally, its employees can independently participate. 

Subscribers joining at 18 and contributing Tk2,000 monthly for 42 years will receive a Tk68,931 monthly pension from 60. Similarly, Tk3,000 monthly yields Tk1,03,396 monthly pension, and Tk5,000 monthly leads to Tk1,72,327 monthly pension, all lasting for life.

Surokkha scheme for informal sector

This scheme will cover for people working in the informal sector or self-employed. Farmers, rickshaw pullers, labourers, blacksmiths, potters, fishermen, women engaged in all types of informal sector can be included in this scheme. The monthly subscription rate in this scheme is Tk1,000, Tk2,000, Tk3,000 and Tk5,000.

The scheme offers a Tk34,465 monthly pension from age 60 through Tk1,000 monthly contributions for 42 years. 

Joining at 18 and contributing Tk2,000 monthly for 42 years results in a Tk68,931 monthly pension from 60. Similarly, Tk3,000 monthly leads to a Tk1,03,396 monthly pension, and Tk5,000 monthly secures a Tk1,72,327 monthly pension for life.

Somota scheme for very poor

In this scheme, with a subscription rate of Tk1,000 per month, the contributor pays Tk500 while the government covers the remaining Tk500. 

Individuals unable to meet basic living expenses from their own income and falling below the extreme poverty line as per the Household Income and Expenditure Survey by the Bangladesh Bureau of Statistics shows are eligible for inclusion in this scheme.

Under the scheme, enrolling at 18 and contributing Tk500 monthly yields a Tk34,465 pension from age 60. For citizens aged 50 and above, contributing Tk500 monthly for a minimum of 10 years results in a Tk1,530 monthly pension.

50% of the contribution can be borrowed

Subscribers can apply for a loan of up to 50% of the deposited amount. Contributions towards the pension are considered investments, eligible for tax deductions, and the pension amount received monthly is tax-free.

If the contributor passes away at least 10 years prior to the contribution period, the deposited amount along with the profit will be returned to the nominee. 

How to register

Officials of the Finance Division mentioned that those who wish to be included in the universal pension scheme must register. An app will be developed to facilitate registration from one’s home, and registration can also be done by visiting union digital centres. Expatriates will have the option to register using a dedicated app from abroad.

Upon completion of registration, each individual will receive a unique identification number. The government aims to include 10 crore citizens in the universal pension scheme, which may involve the issuance of an 18-digit unique identification number.

The Universal Pension Authority will open an account with the state-owned Sonali Bank. Every participant will be required to make monthly contributions to their respective account numbers.

Expatriates can contribute from abroad, while residents can contribute directly to the bank account or through mobile financial service (MFS) providers such as bKash and Nagad.

Number of social security beneficiaries will decrease

Officials of the Ministry of Finance say that the implementation of the Universal Pension Scheme will create an opportunity to gradually reduce the number of beneficiaries of the existing social security programme. Because, under the universal pension system, the social security of the elderly people of the country will be ensured.

Currently, the average life expectancy of people in the country is 72.3 years, but it is likely to increase in the future, according to officials of the finance division.

With the country’s working population at 62%, an official said rising life expectancy and the growth of single households will elevate the dependency ratio in future.

Therefore, a sustainable social security system can be ensured if the population above 18 years is included in the universal pension system, he said.





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