The National Pension Authority says teachers, officers and employees who joined the service before Jun 30, 2024, are not required to join the new scheme
Published : 02 Jul 2024, 06:32 PM
The National Pension Authority has offered protesting university teachers a pledge of security regarding the ‘Prottoy’ scheme offered under the universal pension system.
In a message on Tuesday, the NPA said the teachers, officers and employees who joined the service before Jun 30, 2024, are not required to join the new scheme.
The Prottoy scheme launched from the first day of the current financial year 2024-25 per a previous announcement. The country’s public university teachers are implementing a work stoppage out of fear that their post-retirement financial benefits will be reduced if they are added to the newly-launched pension programme.
In light of the situation, the NPA stated on Tuesday.
The Prottoy scheme was introduced to provide a sustainable pension system for all personnel working at self-governing, autonomous and state-owned organisations and their subordinate bodies, the statement read.
There are 403 self-governing, autonomous and state-owned institutions in Bangladesh. As many as 90 of them offer a pension programme. The remaining institutions have contributory provident fund (CPF) programmes. The officers under the CPF programme receive an occasional gratuity but no pension.
The NPA said the government launched the universal pension scheme for state-owned, self-governing, autonomous, statutory or homogeneous organisations and their subordinate bodies as a large number of people in the country are not included in a well-constructed pension scheme.
According to Section 14(2) of the Public Pension Management Act, all officers in the service of state-owned, self-governing, autonomous, statutory or homogeneous organisations and their subordinate bodies; or employees on and after Jul 1 will be newly added to the Universal Pension Scheme. Finance Minister Abul Hasan Mahmood Ali also made the statement in his budget speech.
However, the Federation of Bangladesh University Teachers' Association, or FBUTA, said the decision to add teachers to the Prottoy scheme is ‘discriminatory’ as the new system will cut 10 percent of their salary, unlike the existing pension system.
Both pensioners and their nominees get pensions for life but this facility will decrease if they are added to the new scheme. The Prottoy scheme also lacks allowances for treatment, two festivals and Pohela Boishakh. There is no increment in the scheme as well.
The NPA statement tried to explain some of the aspects of the Prottoy scheme in an effort to relieve the protesting teachers.
# Teachers/officers-employees who are in service until Jun 30, 2014, will get all pension facilities according to the old system.
# At present, the 'Unfunded Defined Benefit' system is part of the government pension scheme. As a result, all pension expenses are met from the national budget allocation as per requirements. From Jul 1, 2024, the 'Funded Defined Contributory' system of pension has been introduced. Like other countries, this means a step has been taken to save a fixed amount from the salary as a monthly deposit. Ten percent of the basic salary received by the concerned officers or employees, or a maximum of Tk 5,000, whichever is lower, will be deducted from the salary of the officer or employee and the corresponding amount will be paid by the concerned institution.
# The 'Unfunded Defined Benefit' pension system increases the financial burden of the government, which is not sustainable in the long run. On the other hand, the 'Funded Defined Contributory' pension system is sustainable in the long run as the fund is formed based on the contributions received and investment profits. The latter has also been in operation in India since 2004.
# By implementing the new pension system, it will be possible to gradually bring people from all walks of life under a sustainable social security structure.
# When a teacher is appointed to the same post or a higher post in their university or another university after application to the proper authority, it is not considered a new appointment as a public university teacher gets service protection and pay protection. In that case, the teacher will be eligible for existing pension benefits. Only faculty and staff in public universities who are recruited on and after Jul 1, 2024, will be added to the Prottoy scheme.
# Since university teachers retire at the age of 65, they will get a pension after retirement to death although the Universal Pension Management Act provides for a pension from the age of 60. The government will make necessary amendments to the law in that case.
# Lump grants and PRL earned leave are given on an availability basis. It will remain in effect subject to the leave being credited.
# In a contributory pension system, the objective of ensuring the social security of the participant is to determine a reasonable amount of monthly pension rather than a lump sum. For that reason, no provision has been made for gratuity in this case and a measure has been taken to give a monthly pension which is several times more than the existing monthly pension. If Tk 5,000 is deducted from the monthly salary under the Prottoy scheme and the same amount is deposited by the institution, after 30 years a pensioner will get a lifetime pension at the rate of Tk 124,660 per month. The total deposit amount of the pensioner’s income will be Tk 1.8 million. If a pensioner gets the benefit for 15 years, the total amount will be Tk 22,438,800 which is about 12.5 times higher than the deposit. If the pensioner survives for 30 years after retirement, the person will get a pension of about 25 times the deposit.
# In the existing system, a pensioner gets a pension for life. In the case of a pensioner’s absence, their spouse and disabled children get a pension for life. In the new pension system, the pensioner will also get a lifetime pension. In the absence of the pensioner, the person’s spouse or nominee will be entitled to a pension for up to 15 years from the date of commencement of the pension. For example, if a pensioner receives their pension for five years and then dies, the deceased’s spouse or nominee will get a pension for another 10 years.