NSPS and pension schemes for private sector employees

Social security is an important issue for any country that cares about the welfare of its citizens. Developed nations have well-knit social security programmes for which they spend billions of dollars every year. The poor developing nations like Bangladesh do also have the intention to provide social security coverage to their population, particularly to the poor and vulnerable sections. But what they lack is enough money to translate their intention into a reality. However, many of them tend to spend increasing amounts of public money within their available resource envelope, for social security programmes which help the target population to keep themselves somehow afloat. Donors' help to such poverty mitigation efforts often come by.

A sizeable part of the resources that are made available under the safety net programmes do not reach the target population and is often reported to be misappropriated by the politically influential people and unscrupulous officials. While speaking at the first national dialogue on the third draft of the National Social Protection Strategy (NSPS) in Dhaka last Sunday, one key planning commission member highlighted the need for raising the government spending on social safety net programmes. He, however, termed the programmes 'repetitive, complex and inefficient'. The finance minister and the Bangladesh Bank governor pointed out that the safety net programmes were unnecessarily expansive in nature when little more than one-third of the population were poor and hardcore poor.

The finance minister also raised the little-discussed issue of social security. He hinted at bringing around 3.0 million officials and employees of the 'organised' private sector under the 'national pension scheme'.  This was in line with the ruling Awami League's latest electoral pledge to introduce pension schemes in all private organisations by 2018. This programme might face many hurdles. Most of the private sector entities are not that organised, in terms of ensuring security-related welfare of their officials and employees. Many private sector organisations do not even have service rules for their employees and also quite a good number of them have a propensity to ignore the provisions of the labour law. Rigidity of such law, at least in words, is a deterrent to promoting efficiency and productivity of the workplace in many cases. Flexibility of labour law, as and where necessary, is important to encourage the private enterprises to undertake measures aimed at providing security- and welfare-related benefits to their workforce, besides meeting the mandatory requirements of paying, on time, the salaries and wages as well as other currently admissible benefits to them.

On its part, the government would require to enact necessary laws and rules to materialise its objective of bringing private sector officials and employees under the umbrella of national pension scheme. But this has to be made in a way that private enterprises can afford the same. Otherwise, there could be resistance to the move from private sector operators for reasons, genuine or otherwise. For this reason, the government, while making rules, will need to take into cognisance the financial capacity of the units under the 'organised' private sector. Besides, there remains a large population -- the affluent section excluded -- in between the poor and the people employed in public and private sector entities. The government can hardly ignore their welfare or social security issues. It has to devise something to protect this section of the population for the sake of justice and fair play.