With an aim to incorporate employees of different self-governed, autonomous, state-owned, statutory or homogeneous organisations and their subordinate bodies into the Universal Pension Scheme (UPS), the government has introduced a new product named "Prottay Scheme".
Those who would join the services in the organisations on July 1, 2024 and thereafter will be included in the "Prottay Scheme", says a statutory regulatory order (SRO) issued on March 13.
The Ministry of Finance issued a press release in this regard on Wednesday, saying another SRO has been issued on the day outlining details of the new product under the UPS.
"As a result of the introduction of the Prottay Scheme, the interest of the existing officers or employees of these institutions will not be affected and their existing pension/gratuity benefits would remain intact," it said.
Those who have a minimum of 10 years of service left can participate in the Prottay Scheme if they are interested, it said.
"By participating in the Prottay Scheme, monthly pension will be available upon retirement while future financial security would be ensured for the officials and employees of these institutions who would join on July 1, 2024 and thereafter," the press release mentioned.
It said very few self-governed, autonomous, state-owned, statutory or homogeneous organizations and their subsidiary bodies have pension schemes under the existing system.
Most of the employees working in such organisations are covered by the welfare scheme while the CPF (Contributory Provident Fund) system is applicable for them.
In this system the employees are entitled to enjoy a one-time gratuity as a retirement benefit at the end of service, but they will not enjoy any monthly pension. Thus, they face financial uncertainty in post-retirement life.
The government introduced "Prottay Scheme" as an alternative to the existing system to provide financial and social security to the employees in their post-retirement life, said the press release.
In this scheme, 10 per cent of the basic salary of the concerned official or employee of the concerned institution or organisation or maximum of Tk 5,000 or whichever is less, would be deducted monthly while the same amount would be provided by the concerned organisations.
Then both the amounts will be deposited by the concerned organisations and institutions against the corpus accounts of the said officials and employees under the management of the National Pension Authority.
In continuation of the process, a pension fund will be created against the concerned officials and employees while the said fund will be invested by the National Pension Authority in profitable sectors.
Then pension will be provided to the officials and employees of these institutions on the basis of gained profit and deposited fund received as subscription.
In the existing CPF (Contributory Provident Fund) system, the employee pays 10 per cent of the basic salary while the organisations pay 8.33 per cent of the basic salary. In the Prottay Scheme, the organisations will pay 10 per cent of the basic salary which is 1.67 per cent more than the CPF scheme.
In Prottay Scheme, if a person contributes Tk 2,500 monthly from his or her own salary after joining an institution and thus contributes the same amount for 30 years, he or she will get a pension of Tk 62,330 per month after retirement at the age of 60 years.
In this case, the total amount of contribution paid from the employee's own salary at Tk 2,500 per month for 30 years would be Tk 900,000 and the total amount of contributions paid by the concerned organisation will be Tk 900,000 thus raising the overall amount to Tk 1.8 million.
If any pensioner dies at the age of 75 years, the pension amount in this 15 years will be Tk 11,219,400, which is 12.47 times higher than the employee's own contribution, said the press release.
This amount is likely to increase further as the pensioner would enjoy such benefits in his lifetime. If the rate of return on investment increases, then the amount of monthly pension will increase.
Furthermore, all the expenses of the National Pension Authority will be met by the government while the monthly pension will be determined by calculating the annuity of the subscriber on the basis of corpus accumulated by the subscriber and investment income.
Investment rebate will be available on the accumulated subscriptions while the received pension would be income tax free. Since the Scheme is guaranteed by the state, the scheme is cent percent risk free and safe.
The employee registered in this scheme will automatically receive the monthly pension amount in his or her bank account from the following month after he or she reaches pensionable age, which will be notified to him or her through mobile phone SMS.
In this case, he or she will not need to go to the National Pension Authority or any other office or submit any kind of proof.
The release also mentioned that the Prottay Scheme would be attractive to the new officers and employees and would also be effective in ensuring their financial security.
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