expanding old age pensions in Bangladesh

A daily newspaper in Bangladesh reports that the finance ministry has announced “plans to introduce a universal pension system for both public and private sector employees”. Reading the column, however, shows that the scheme is not universal. It is contributory, and private. If there are no contributions, there will be no old age pension. Government involvement will be limited to matching grants equal to 25 to 50% of the contributions of low-income savers.

The scheme seems to have been promoted by the World Bank.

The World Bank has informed the government about its willingness to provide financial and technical assistance for the private sector pension scheme.

The lender has committed $100 million for introducing the private sector pension scheme.

As the introduction of the scheme got delayed, $80 million has been given to the insurance sector. The remaining $20 million will be provided when the pension scheme starts functioning. ….

The WB proposal builds on the best practices from countries such as India, Malaysia, Sweden and Australia.

In particular, it uses India’s experience in developing the national pension scheme.

Rejaul Karim Byron, “Private pension shaping up“, The Daily Star (Dhaka, Bangladesh), 29 May 2018.

To add insult to injury, the limited funding will reach only 100,000 beneficiaries, as a test  of the effectiveness of the scheme.

Earlier TdJ posts on social pensions in Bangladesh are available here, here and here.

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