Govt pension scheme is in fact nation-wide insurance scheme

Editotrials

What the Cabinet in its regular weekly meeting on Monday passed as a Universal Pension Scheme is in fact a nation-wide grand insurance scheme already being run by some leading life insurers of the country.

Cabinet Secretary Khandkar Anwarul Islam told waiting journalists that all Bangladeshi nationals aged from 18 to 50 years including expatriates can participate in this pension scheme and pay premium.

As per the briefing of the Cabinet Secretary, according to the draft law, a person will have to pay premium for at least 10 years to get pension from the age of 60 until his death, said Anwarul.

If an elderly person dies before the age  75 years, the nominee will get the pension for the remaining time, he said citing an example that if anyone dies at 62, his/her nominee will get pension for 13 years.

However, the amount of premium will be determined by a rule under the proposed law, he added.

According to the proposed law, there will be a five-member national pension authority headed by a chairman and also a 15-member governing body with the finance minister as its chair, said the Cabinet Secretary. 

This is an exact replication of the pension insurance scheme of the Bangladesh Jiban Bima Corporation which has been offering policies under the same for decades. The initiative of the government would give the system a boost.

It's not clear what will happen to JBC's Pension Insurance Scheme which also offers pension benefits till the death of a policy holder. However in case of earlier death JBC pays monthly pension to beneficiaries for up to 10 years.

In this respect the governments scheme is an improvement upon the JBC scheme for offering pension to beneficiaries for up to 15 years.

A crucial question is whether the state by doing this will infringe the innovation of an insurer or shall have to compensate it for this.