Three years after its high-profile launch, the government’s ambitious initiative to provide a universal pension for all citizens aged over 60 is showing no signs of becoming truly universal.
The project, which was initially introduced with great enthusiasm by the then-Awami League regime, has seen registration numbers hit a significant plateau, with a substantial portion of those already enrolled failing to maintain their monthly contributions.
According to official data from the final week of April, a total of 377,524 people have registered for the scheme, the vast majority of whom joined during the programme’s first year.
This figure reveals a stark stagnation in growth; as of 15 October 2024, there were 372,155 registered members. By 13 February – the day after the BNP assumed government – that number had only reached 373,308.
These statistics indicate that during the 18-month tenure of the interim government, only just over a thousand new participants enrolled in the scheme.
While the rate of registration has seen a slight uptick under the new BNP administration, officials admit it remains far below the levels required to reach the state’s long-term objectives.
Widening trust deficit, political uncertainty
The government had originally set a target to bring at least one member from 40 million families under the pension umbrella by 2030.
Under these long-term plans, participation is intended to eventually become mandatory, at which point traditional pensions for civil servants would be discontinued.
However, the current reality is far from this goal, as registration does not necessarily translate into financial commitment.
Mohammed Suratuzzaman, executive chairman of the National Pension Authority, revealed to TIMES of Bangladesh that approximately 40 per cent of current subscribers are not paying their instalments.
While he described the situation as a temporary phase and expressed hope that participation would rebound once public confidence is restored, the underlying lack of trust remains a major hurdle.
The crisis of confidence is best illustrated by the testimony of Kabir Ahmed Chowdhury, a journalist and author from Sylhet, who initially viewed the scheme as a groundbreaking initiative.
“I didn’t just want to be a part of it; I believed in it enough to write articles encouraging others to join,” he told TIMES.
However, he stopped paying his instalments after July 2024. When asked for the reason, he cited the political opposition the scheme faced and the interim government’s frequent criticism of projects initiated by the previous administration.
Although Finance Adviser Salehuddin Ahmed had previously promised to make the pension scheme more attractive, Chowdhury argues that the administration “actually did nothing” to follow through.
He noted that in matters involving long-term financial security, people require absolute stability, and he is waiting for a clear government declaration that this is a permanent economic programme before he clears his arrears.
Modernisation efforts and search for new investment
In an effort to revitalise the programme, the government has decided to secure a $100 million loan from the Asian Development Bank (ADB).
These funds are earmarked for the administrative modernisation of the pension system, the strengthening of IT infrastructure, and the training of a skilled workforce capable of managing the massive fund.
Currently, the total deposits collected are invested in government bonds, but the National Pension Authority is now seeking to appoint consultants to identify new, more diverse sectors for investment to ensure the fund’s sustainability.
Simultaneously, the Authority has proposed several structural reforms to broaden the scheme’s appeal.
These include the introduction of an Islamic Shariah-based version of the pension, the inclusion of private school teachers, and a “gratuity” feature that would allow subscribers to withdraw 30 per cent of their total deposits after five years.
Reforms are also being targeted at the ‘Probash’ (Expatriate) scheme to make it more accessible to Bangladeshis living abroad.
Demographic breakdown and economic realities
Data shows that the majority of those who have registered belong to the lower-income brackets. The “Somota” scheme, designed specifically for the poor, accounts for nearly 287,000 members.
In this category, participants deposit a maximum of Tk1,000 per month, with the government providing a matching contribution of Tk500. The “Surokkha” scheme, intended for self-employed and informal sector workers, has the second-highest enrollment with approximately 65,000 registrants who can deposit between Tk1,000 and Tk5,000 monthly.
Other schemes have seen more modest participation. The “Progoti” scheme for private employees has around 25,000 members, and the government has recently increased its maximum deposit limit from Tk5,000 to Tk15,000 to attract higher earners.
Meanwhile, the “Probash” scheme for expatriates has just over 1,000 members. Initially restricted to deposits of either Tk5,000 or Tk10,000, this scheme has now been made more flexible, allowing monthly deposits ranging from Tk1,000 to Tk10,000.
Despite the sluggish growth in membership, total deposits reached approximately Tk 254 crore by late April, a significant increase from the Tk 158 crore recorded on 13 February.
Expert critiques and structural weaknesses
Economist Masrur Reaz described the current statistics as “disappointing,” attributing the low investment levels to the broader economic climate.
He argued that high inflation, rising unemployment, and the escalating cost of living have severely eroded the ability of ordinary citizens to save, which directly impacts their participation in the pension scheme.
Furthermore, he noted a lack of targeted initiatives to include specific groups, such as the millions of workers in the ready-made garment (RMG) or export sectors.
Communication expert Golam Rahman added that the scheme appears to have lost its status as a government priority. He pointed out that the consistent promotional efforts seen at the time of its 2023 launch have vanished, leading to a natural decline in public interest.
Beyond promotion, Dr Reaz highlighted a fundamental structural flaw: the lack of insurance benefits or a lifetime pension for surviving spouses. He noted that under current rules, if a subscriber dies at age 59, their nominee receives only the deposit and accrued profit, rather than a continued pension.
This contrasts unfavourably with civil service pensions where a spouse receives benefits for life. He warned that because it is unlikely for both a husband and wife in one family to open separate accounts, the current system leaves nominees facing significant financial uncertainty in their old age.
How the scheme operates
The Universal Pension Scheme is open to all Bangladeshi citizens aged between 18 and 50 based on their National ID cards. Special provisions allow those over 50 to join, provided they contribute for at least 10 years.
Expatriates sending their instalments in foreign currency are also offered a 2.5 per cent incentive. The system is designed for transparency, allowing participants to log into a dedicated website at any time to view their total deposits and annual profit growth.
Pensions are distributed automatically once a member reaches 60, with the amount determined by the length and size of their contributions. No separate application is required. For example, an 18-year-old who deposits Tk2,000 monthly for 42 years would receive a monthly pension of Tk 68,931.
Conversely, someone who joins later and deposits Tk10,000 monthly for only 10 years would receive a pension of Tk15,302. While the subscriber is guaranteed a pension for life, the nominee benefits are strictly limited.
If a pensioner dies before receiving benefits for 10 years, their nominee will receive the pension for the remaining five years. However, if the subscriber lives to receive the pension for 15 years or more, the nominee receives nothing upon their death.
