By Asif Showkat Kallol (Dhaka Bureau)
In a significant stride toward bridging the long-standing gap in old-age income security, Bangladesh has announced an expansion of its flagship Universal Pension Scheme (UPS). The initiative aims to provide formal retirement protection to the nation’s estimated 18 million private-sector workers, who have historically been excluded from the institutional pension benefits enjoyed by government employees.
Unveiled as part of the social protection strategy for the FY2026-27 national budget, the government has allocated Tk 144,338 crore for its comprehensive social safety net programs. Under the newly proposed reforms to the UPS, subscribers will now gain the flexible option to withdraw up to 30% of their accumulated savings as a lump-sum gratuity upon retirement, while receiving guaranteed monthly pension payments for life from the remaining balance.
Empowering the Informal and Private Workforce
Managed by the National Pension Authority (NPA), the scheme has registered rapid growth since its inception, enrolling more than 377,000 citizens across its specialized programs. Total contributions have climbed to approximately Tk 260 crore, with strategic public investments reaching nearly Tk 286 crore.
The Universal Pension Scheme currently features distinct models tailored to different segments of the working population:
* The Progoti Scheme: Designed specifically for private-sector corporate and industrial employees, requiring equal matching contributions from employers and employees on a 50:50 basis.
* The Surokkha Scheme: Targets self-employed individuals and informal-sector workers, including freelancers, farmers, and day laborers, to integrate them into the formal financial safety net.
Enrolment is open to citizens aged between 18 and 50 years, with pension benefits systematically rolling out once a participant reaches the age of 60. To ensure financial flexibility, the existing framework also allows subscribers to borrow up to 50% of their accumulated savings against their accounts during times of need.
Deepening the Social Safety Net
In line with humanitarian and inclusive governance models, the framework provides robust security for families. In the unfortunate event of a subscriber’s death, nominated beneficiaries are legally protected and will continue to receive the monthly pension benefits until the timeline when the subscriber would have reached 75 years of age.
To accelerate public participation and build a more inclusive safety net, policymakers are currently designing a series of progressive next-step reforms. These include:
* The launch of a dedicated Shariah-compliant pension scheme to accommodate cultural and religious preferences.
* The expansion of the Progoti Scheme to formally cover outsourced and contractual workers.
* Provisions for lifetime pension benefits for nominees to guarantee generational financial security.
A Pillar for Social Justice
International observers and policymakers view the evolution of the Universal Pension Scheme as a vital structural pillar in Bangladesh’s socio-economic transformation. By directly targeting old-age vulnerability and promoting long-term collective savings, the program marks a shift toward a rights-based social framework—ensuring that economic growth translates into dignity and security for the working class.
##########
The Writer:
Asif Showkat Kallol: Works for a German-based online outlet, The Mirror Asia, as Head of News and is a Contributor, Pressenza- Dhaka Bureau.
