Public university teachers' pension to continue with govt fund

Retired teachers and employees of public universities will continue to receive pension benefits from government funds despite the pension system's introduction without the Finance Division's consent.

However, the fate of pension benefits for employees in other autonomous organisations, facilitated by government funds, awaits further scrutiny, said a senior Finance Division official, requesting anonymity.

He told The Business Standard that Prime Minister Sheikh Hasina issued these instructions during a meeting with Finance Minister Abul Hassan Mahmood Ali on 25 January.

Bangladesh Bank Governor Abdur Rouf Talukder and Finance Division Secretary Md Khairuzzaman Mozumder were also present at the meeting.

Since 1 July 2023, the Finance Ministry has frozen the pension funds of 12 state-owned and autonomous institutions, including the Bangladesh National Scientific Technical Documentation Centre, Bangla Academy, Bangladesh Shilpakala Academy, the National Museum, Osmani Museum, Bangladesh Agricultural Research Institute and others that have been providing pensions and retirement benefits to their employees from government allocations for years without approval from the Finance Division.

However, the ministry continued to release funds for the pensions of public university teachers and employees.

When asked about the prime minister's directives concerning pension benefits for autonomous institutions, the finance division official said the autonomous institutions facing a suspension on their pension funds will undergo additional scrutiny.

The official said the meeting also involved discussions on the government's cash incentive facilities for various export products, as well as the current economic conditions of the country.

According to Finance Division officials, in accordance with the guidelines established by the cabinet division in 1999, a provision exists for the self-financing of pension facilities for officers and employees in various autonomous institutions, mirroring the system for government employees. To implement this, organisations must submit applications and obtain prior approval from the Finance Division, including details of their income and expenses. Autonomous institutions unable to fund pensions from their own income will be permitted to provide gratuity to their officers and employees.

According to the Finance Division, 12 autonomous institutions have implemented pension schemes without obtaining approval, disbursing pensions using government funds. Retired officers and employees of these institutions receive pensions from the government's bulk allocation to these institutions. The Finance Division became aware of this issue following the implementation of the iBUS (Integrated Budget and Accounting System) software.

For the fiscal year 2023, the revised budget allocation for pensions in these 12 institutions amounted to Tk779.32 crore, with Tk688.95 crore designated specifically for university pensions. 

According to data from the University Grants Commission, the allocation for university pensions and retirement benefits was Tk576.64 crore in FY22 and Tk587.17 crore in FY21.

The State-Owned Enterprises Division of the Finance Ministry approves the implementation of pension schemes for officers and employees in autonomous and state-owned institutions.

An official at the division, speaking on condition of anonymity, told TBS, "Pension benefits for retired employees of autonomous institutions may be maintained. However, newly appointed employees might be brought under gratuity benefits instead of pensions. The issue is under consideration."

The official also mentioned that a complexity has arisen regarding the pensions of autonomous institutions. Granting them pension benefits would erase the distinction between them and government employees. 

He added that a comprehensive review is underway to assess when and how these institutions introduced the pension system, alongside scrutinising their actual income and expenditure details.

Additionally, 13 institutions are utilising government funds for pension and retirement benefits, sanctioned by the Ministry of Finance under the prerequisite of initiating pension facilities from their own income. The Finance Division has asked these institutions to promptly establish pension funds from their internal resources.

Furthermore, 14 autonomous institutions have been disbursing pension benefits to officers and employees using their own funds, with approval from the Finance Division. They are expected to continue their operations as usual, according to Finance Division officials.