Contributors to Bangladesh’s universal pension scheme will now be permitted to withdraw up to 30 percent of their total accumulated pension fund as a one-time benefit upon reaching the age of 60, according to a major policy decision announced by the National Pension Authority (NPA) on Wednesday.
This marks a significant shift in the country’s pension policy, which previously did not allow any lump sum withdrawals.
The new provision is aimed at enhancing flexibility, inclusiveness, and long-term sustainability within the pension framework, making it more responsive to diverse income levels and working conditions.
The announcement followed the second board meeting of the NPA, held at the Ministry of Finance and chaired by Pension Management Board Chairman and government Economic Advisor, Dr. Salehuddin Ahmed.
According to a press release from the ministry, contributors who opt for the one-time withdrawal will still be eligible for regular monthly pension payments under the existing rules. NPA officials clarified that individuals who choose not to take the lump sum will receive higher monthly pension benefits.
Higher Contributions for High Earners
In a related move, the board reduced the minimum monthly contribution for participants in the ‘Probash’ and ‘Pragati’ schemes—from Tk 2,000 to Tk 1,000—acknowledging the lower average income levels among these groups.
However, participants in the Pragati scheme who earn above the average income of private-sector employees will now be required to contribute Tk 15,000 per month, up from the current Tk 10,000.
Additionally, service workers employed through outsourcing contracts will now be eligible to enroll in the Pragati Pension Scheme.
The board also approved a proposal for the NPA to become a member of the International Social Security Association (ISSA). It further decided to explore the introduction of an Islamic version of the universal pension scheme, with findings to be presented at the next board meeting.