What is the Universal Pension Scheme?
Government employees get a pension when they retire, but most farmers, shopkeepers, private-sector workers and migrant workers do not. The Universal Pension Scheme is the government’s way of filling that gap.
The idea is simple: during your working years you pay in a fixed amount each month, the money is invested and grows, and in old age you receive a monthly pension. In other words, you set money aside today for your future self.
Say Kamrul, a 30-year-old shopkeeper, starts paying Tk 1,000 a month. Over the 30 years to age 60 he pays in Tk 3.6 lakh of his own money, and profit is added on top each year. From 60 he receives a monthly pension for life; how much depends on what he paid in and the profit credited.
How it works
The scheme was launched in August 2023 under the Universal Pension Management Act 2023 and is run by the National Pension Authority under the Ministry of Finance. Citizens aged 18 to 50 with a national ID card can register online. People over 50 can also join, but receive a pension only after paying for 10 consecutive years.
You choose a scheme and a monthly contribution, then pay every month (or several months in advance). You must contribute for at least 10 years. The money is invested mainly in government securities, and each year the Authority announces a profit rate that is credited to your account.
From age 60 you receive a monthly pension for life. Its size depends on how much you paid in, for how many years, and the profit credited along the way. The earlier you start, the bigger the pension.
According to the projections on the National Pension Authority’s website, paying Tk 1,000 a month for 42 years gives an estimated monthly pension of about Tk 34,465; paying the same for only 10 years gives about Tk 1,530. These are estimates based on an assumed profit rate, not guarantees, and money will be worth much less in 42 years’ time.
The four schemes
- Probas
- For Bangladeshis living or working abroad. Monthly contributions from Tk 1,000 to Tk 10,000 in set steps, payable in foreign currency; the pension is paid in taka. On returning home you can keep paying in taka or switch scheme.
- Progoti
- For private-sector employees and owners. Contributions from Tk 1,000 to Tk 15,000 (Tk 500 for outsourced workers). If the employer takes part, it pays half and the employee half; otherwise the employee can join alone.
- Surokkha
- For the self-employed and informal workers such as farmers, rickshaw pullers, labourers, fishermen and weavers. Contributions of Tk 1,000, 2,000, 3,000 or 5,000.
- Samata
- For people on low incomes; under current rules, annual income of no more than Tk 60,000. Of the Tk 1,000 monthly contribution, the member pays Tk 500 and the government Tk 500.
- Prottoy (scrapped)
- Introduced in 2024 for employees of autonomous and state-owned bodies; scrapped by the government in August 2024 after protests by university teachers.
Nominees, loans and withdrawals
Under the Act, if a pensioner dies before 75, the nominee receives the monthly pension for the remaining period, until the pensioner would have turned 75. If a member dies before completing 10 years of contributions, the nominee gets back the money paid in plus profit.
You can borrow up to 50% of what you have paid in, repaid with a fee. In 2025 the Authority decided that at pension age members may take up to 30% of their total deposits as a lump sum if they wish. Further changes, such as a lower pension age, a lifetime pension for a surviving spouse and a Shariah-based version, are under consideration; rules can change, so check the latest ones when you join.
What return to expect
The profit on contributions is not fixed in advance; the National Pension Authority declares it each year. For FY2024–25 the highest rate was 11.61% (depending on how long the money had been invested), and for FY2025–26 it was 11.72%. These rates reflect the high government bond yields of the time; if interest rates fall, the profit rate may fall too.
The real question is what the pension will buy when you retire. Over 30–40 years inflation erodes the value of money a lot, so a pension that looks large in today’s terms may not be as large in the future.
Why people choose it
- A government-run scheme that gives people outside government service a pension.
- A monthly pension for life, with cover for a nominee for a set period.
- In Samata the government pays half; in Progoti the employer can too.
- Monthly payments build a habit of saving.
- Contributions count for the tax rebate, and the pension is tax-free.
Points to weigh
- Money is locked away for a long time, with limited ways to take it out.
- The profit rate changes every year and is not guaranteed.
- Over the long run inflation eats into the pension’s real value.
- The scheme is new and its rules keep changing.
- With fewer than 10 years of contributions there is no pension.
Tax
Under the Universal Pension Management Act 2023, contributions count as an investment and qualify for the income tax rebate; the rebate rate and limit are set by the Income Tax Act 2023 and each year’s Finance Act.
Under the Act, the monthly pension is free of income tax. Tax rules can change through amendments or Finance Acts.
Tax rules can change with each year’s Finance Act. Before a big decision, check the latest rules or speak to a tax adviser.
How to get started
- Find the right scheme for you on the National Pension Authority’s website (upension.gov.bd).
- Register online with your national ID, mobile number, a bank or mobile financial services account and your nominee’s details.
- Pick a monthly amount you can keep paying for many years.
- Pay through a bank, mobile financial services or online, and keep the receipts.
- Check your account balance and credited profit online from time to time.
Check before you start
- Can I keep paying this amount for 10 years or more?
- Am I sure which scheme I qualify for?
- Have I kept emergency money aside?
- Have I recorded my nominee correctly?
- Have I read the latest rules (withdrawals, pension age) on the Authority’s website?