Bangladesh govt to fund pensions of 25 institutions
These bodies were providing retirement benefits flouting rules
The government has decided to allocate Tk1,200 crore in the upcoming budget for pensions of employees at 25 state-owned and autonomous institutions, which had been providing retirement benefits from government funds without approval.
All employees who joined these organisations before 1 July will be given pensions from the government fund, according to a finance official involved with budget formulation.
However, employees recruited after 1 July will not receive pensions from government funds. Instead, they will be enrolled in the "Prottoy" category of the Universal Pension Scheme.
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The official said the decision has been taken following the instructions of the prime minister. As a result, funds for this purpose that had been frozen since the start of the fiscal year were released from the current budget earlier this month.
According to Cabinet Division instructions in 1999, state-owned and autonomous organisations can fund pensions for their employees by using their own income. They need to apply with financial details and get approval from the Finance Division beforehand.
In light of the instructions, 17 institutions introduced pension schemes with the division's approval.
However, 12 institutions launched their pension systems without permission. Besides, 13 started running pension schemes with government funds despite taking the approval for running the scheme with their own funds.
These include public universities, Bangladesh Council of Scientific and Industrial Research, Bangladesh Agriculture Research Institute, National Museum and Bangla Academy, among others.
The revised budget for the 2022-23 fiscal year allocated total pension expenditure for these institutions at Tk779.32 crore, with teachers, officials and employees of public universities accounting for the largest share of Tk688.95 crore.
The 13 institutions running pension schemes with government funds include the Bangladesh Water Development Board, Bangladesh Rural Development Academy, Bangladesh Inland Water Transport Authority, and Bangladesh Rice Research Institute.
In the revised budget for 2022-23, the government allocated Tk321.76 crore for pensions in these institutions.
Why the decision
Finance officials said that previously there was no pension allocation in the budget for these institutions. Instead, they had been funding pensions through block allocations from the budget.
However, at the end of the last fiscal year, this unauthorised move was detected in the iBAS++, the government's financial management information system.
With the revelation, the finance ministry only released pension funds for employees of public universities and withheld funds to other 24 institutions.
As a result, many retired officers and employees who previously received monthly pensions have ceased receiving them, leading to protests from affected organisations, officials said.
To address the issue, Finance Minister Abul Hassan Mahmood Ali and Finance Secretary Khairuzzaman Mozumder met with the prime minister in January, where it was decided that funds will be allocated for pensions and new recruits will be enrolled in the Universal Pension Scheme.
Nevertheless, public university teachers are opposed to this government decision and have announced movement programmes in response.
Finance officials further said 14 more institutions applied for approval to start pension schemes. However, their applications were rejected as these institutions were unable to finance pension benefits from their own income. Therefore, employees of these organisations will receive gratuity as interim benefits.
The 14 institutions include the Bangladesh Inland Water Transport Corporation, Water Resources Planning Organisation, Bangladesh Board of Unani and Ayurvedic Systems of Medicine, Bangladesh Employees Welfare Board, National Book Centre, Bangladesh Atomic Energy Commission, etc.
