Progoti pension scheme to cover bank employees

The government is moving to bring all bank employees under the Progoti package of the Universal Pension Scheme.

The Bangladesh Bank and managing directors of all scheduled banks have been asked to take “necessary steps” to implement the directive.

The finance ministry said in a media statement that a “crucial review meeting” was held at the Secretariat on Wednesday to expedite the process.

“At the meeting, it was unanimously decided that representatives of Bangladesh Bank and managing directors of all scheduled banks will take necessary measures to include their officials and employees under the Progoti scheme,” the statement said.

It added that a target has been set to include at least one member from each of around 40 million families in the country under any pension scheme by 2030, with bankers expected to play a key role in achieving the goal.

The meeting was chaired by Finance Division Secretary Nazma Mobarek and attended by representatives of Bangladesh Bank and managing directors of all scheduled banks.

Nazma said separate desks and banners must be set up in all bank branches to increase subscribers of the Universal Pension Scheme.

She said the scheme should be promoted as part of banks’ own outreach activities and employees should be actively engaged. She also stressed that employees of all private banks should be brought under the Progoti scheme.

The National Pension Authority has already signed memorandums of understanding with 48 banks and financial institutions to expand the system, while 24 banks are currently collecting pension contributions.

Introduced with fanfare during the previous Awami League government, a total of 377,930 people had registered under the four pension schemes by May 30.

Total deposits in the fund stood at around Tk 26 billion, while total investment reached Tk 28.6 billion.

National Pension Authority Executive Chairman M Sohrab Uddin presented the main paper at the meeting.

He said nearly 18 million registered workers in the private sector lack post-retirement financial security, unlike government employees who receive pensions.

He said the Progoti scheme introduced in 2023 for private sector employees is considered a sustainable solution to bridge this gap.

Proposals were also placed at the meeting to make the scheme more attractive, including introducing a Shariah-based pension option, considering lifelong pension benefits for nominees, and including outsourced workers under the Progoti scheme.

Key features of the Progoti scheme were also presented:

• Designed for private sector organisations and employees
• If an organisation joins, 50 per cent of the contribution will come from employees and 50 per cent from the employer
• Monthly contribution ranges from Tk 1,000 to Tk 15,000
• Lifelong monthly pension after retirement
• Income tax rebate on contributions and tax-free pension income
• Up to 30 per cent of the corpus may be withdrawn as a lump-sum gratuity after 60 years of age
• State-guaranteed investment

The Universal Pension Scheme was launched on Aug 17, 2023, for long-term financial security in old age.

However, following the change of government on Aug 5, 2024, uncertainty emerged over the scheme, and public participation declined despite continued operations under the interim administration.

Initially, four schemes -- Prabash, Progoti, Suraksha and Somota -- were introduced.

A fifth scheme Prottoy, meant for government and autonomous institution employees, faced resistance and was not implemented.