'Prattay Scheme' added to universal pension scheme

BSS || Shining BD

Published: 3/21/2024 4:25:06 AM

The government launched a new pension scheme titled "Prattay Scheme" in a bid to incorporate the staffs of the self-governed, autonomous, state-owned, statutory or homogeneous organizations and their subordinate bodies in to the Universal Pension Scheme.

According to the SRO No-47-Act/2024 issued on March 13, 2024, all the officers or employees in the service of all self-governed, autonomous, state-owned, statutory or homogeneous organizations and their subordinate bodies, who would join in such service on July 1, 2024 and thereafter would be included under the Universal Pension Scheme Management Act.
Besides, on March 13, 2024, another SRO titled No-48-Act/2024 was issued which declared the outline of the Prattay Scheme applicable to the employees of the aforesaid institutions, said a Finance Ministry press release.
As a result of the introduction of the Prattay 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.
However, those who have a minimum of ten years of service remaining can participate in the Prattay Scheme if they express interest.
By participating in the Prattay 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.
In the existing system, very few self-governed, autonomous, state-owned, statutory or homogeneous organizations and their subsidiary bodies have pension schemes. Most of the employees working in such organizations are covered by the welfare scheme while the CPF (Contributory Provident Fund) system is applicable for them.
In the aforesaid 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. As a result, one often faces financial uncertainty in post-retirement life.
The government introduced 'Prattay Scheme' as an alternative to the existing system to provide financial and social security to the employees in their post-retirement life. In this scheme, 10 percent of the basic salary of the concerned official or employee of the concerned institution or organization or maximum of Taka 5,000 or whichever is less, would be deducted monthly while the same amount would be provided by the concerned organizations.
Then both the amounts will be deposited by the concerned organizations 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, 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 percent of the basic salary while the organizations pay 8.33 percent of the basic salary. In the Prattay Scheme, the organizations will pay 10 percent of the basic salary which is 1.67% more than the CPF scheme.
In Prattay Scheme, if a person contributes Taka 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 pension of Taka 62,330 per month after retirement from the age of 60 years.
In this case, the total amount of contribution paid from the employee's own salary at Taka 2,500 per month for 30 years would be Taka 9,00,000 and the total amount of contributions paid by the concerned organization will be Taka 9,00,000 thus raising the overall amount to Taka 18 lakh.
If any pensioner dies at the age of 75 years, the pensioned amount in this 15 years will be Taka 1,12,19,400, which is 12.47 times higher than the employee's own contribution.
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 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 said that the Prattay Scheme would be attractive to the new officers and employees and would also be effective in ensuring their financial security.

Shining BD