Radical pension reform awaits PMO approval

The Ministry of Finance (MoF) has submitted a proposal before Prime Minister Sheikh Hasina on the planned reform of the existing pension scheme.

The PMO holds the authority to approve or disapprove of the proposal or to suggest any amendment.

If approved, the plan is likely to take effect in the next fiscal year (FY 2017-18). The MoF in its submission proposed that the annual increment on the monthly pension payments should be executed in different ratios for different graded employees.

As proposed, for the employees graded 9th to 20th the annual increment should be 6pc, for 3rd-and 8th-graders 5.5pc and for those above 3rd grade it should be 5pc.

The proposed pension reform would bar the retiring public servants from withdrawing more than half the gross pension money at one go.

The remaining half would be retained and paid on monthly basis with annual increments.

Currently, some 36,000 government employees go on retirement every year.