Dhaka, Bangladesh (BBN)-The Bangladesh government is considering introducing a comprehensive pension system for all.
Finance Minister AMA Muhith exposed this while placing his budget speech for the fiscal year 2016-17 at the Bangladesh National Parliament in Dhaka Thursday afternoon.
The Bangladesh government will reform the existing pension system and introduce a contributory pension system for the public servant who will join in future, the finance minister said in his budget speech.
Currently, only five percent of our working age populationare employed in government services who enjoy pension benefits. Although about eight percent of remaining 95 percent people employed in private sector receive gratuity benefits, there is no pension or gratuity scheme for the rest, he pointed out.
“We plan to introduce, in phases, under an integrated government-run framework, a comprehensive pension system for all including the self-employed as well as those formally or informally employed in semi-government organizations and the private sector,” the minister said.
He also noted that our demographic structure is changing due to declining population growth rate and increasing life expectancy rate. As a result, number as well as ratio of elderly people in total population is slowly increasing. On the other hand, due to urbanisation, number of nuclear
Family is also rising, which increases future risks of financial and social insecurity for ageing population, the minister expressed his optimism.
“It will be difficult for government alone to manage this risk. In this context, introduction of an inclusive and robust pension scheme for all working class people including the aged is now a demand of the day,” he said.
To this end, we are considering bringing fundamental changes to our existing pension system. We will reform the existing pension system and introduce contributory pension scheme for all government employees who will join in future, the minister added.
DPS system has created an opportunity for establishing pension system in the private sector; the new universal pension plan will center around this concept. On one hand, this system will guarantee financial and social protection of the ageing population, and on the other hand, provide additional resources to meet long term investment demand along with deepening of financial sector.
The government has allocated BDT 169.15 billion for the government pensioners for the next fiscal year.
It was BDT 111.45 billion in the revised budget of the outgoing fiscal year.