The passage of the Universal Pension Management Bill, 2023 by the Jatiya Sangsad (JS) on Tuesday last is indeed a remarkable achievement for the country. According to the parliament-approved Bill, all the citizens of the country aged between 18 and 50 years, if they want, will be able to join the pension scheme by regularly contributing a certain amount of subscription to the pension fund. In fact, the Bill, if and when takes effect as a law, will mark the realisation of a long-cherished dream of the country's working people most of whom remain unprotected after their retirement age. Notably, people in government service or those working for organisations with regular wage or salary structure have post-retirement provisions for them. But that is not so with the nation's majority workforce, 85 per cent of whom are engaged in the informal sector.
In the past, the bread earners in society would depend on their younger family members to support them in their old age. But time has changed and the extended family system is breaking up giving way to nuclear families. As a result, even after retirement, with none to look after, many old people have to fend for themselves. Against this background, such a law can be a lifeline not only for the young working population who are going to reach their retirement age within the next two to three decades, but also for those who have already retired from work. The approved Bill provides that people above 50 can also benefit from the pension scheme, if they contribute to the pension fund for at least 10 years. In case of the death of a pensioner, her/his nominee will get certain amounts of benefit. This is definitely a reassuring piece of news for the country's older population and their dependants. However, certain important details about the pension scheme are yet to be worked out. These include, for example, the amount of monthly or quarterly subscription that a prospective pensioner will have to pay to the pension fund or what the government's matching contribution to it is going to be. These points need to be spelt out clearly. Because, these are the issues of highest interest to the would-be clients of the pension scheme.
Apart from the benefits the would-be pensioners are going to derive from the scheme, the government itself will also be a big beneficiary of the scheme, since pension fund will be invested in various profit making activities including the government's various debt instruments like treasury bills, bonds and in development projects. Such investments promise to be an additional source of the government's income. In that case, the government's dependence on bank borrowing could be reduced considerably. Once operational, the pension scheme can also be of help for the government in other ways. For instance, a portion of the financial support that the government is now providing to the old people and the vulnerable segments of society under the social safety net programmes could be channelled through the pension scheme.
There is no question that the promises the universal pension scheme holds out are immense. Equally, the challenges facing the government particularly regarding its implementation will be humongous. As expected, the universal pension scheme's success will hinge on its efficient and transparent management by a set of people who have the required know-how to run such programmes. Understandably, the cardinal virtue of those in charge, especially in the envisaged National Pension Authority and other executives down the line should be beyond question.