PENSION MONEY Govt servants press for full encashment

The government is under pressure from public servants to reinstate 100 per cent encashment of pension money by them on retirement at the age of 59 years.
As secretaries of the ministries and divisions placed the demand to finance minister AMA Muhith at one of the pre-budget discussions, the ministry officials said the plea was expected to get high consideration during announcement of new fiscal measures in parliament on June 7.
Secretary of general economic division Shamsul Alam told New Age on Monday that he had no personal opinion about the particular demand raised by the secretaries.
‘It is up to the government to examine merits and demerits of the demand before making a decision,’ he said.
The particular demand in addition to longstanding demands for increasing retirement age and home loan at subsidised rate are getting louder ahead of the next general election scheduled to be held in January.
Prime minister’s office has already suggested that the finance ministry should introduce more investment tools, including 10-15 years’ bonds, for retired public servants in the next budget. 
The demand for 100 per cent encashment of pension money was made after the ministry of finance on January 9, 2017 notified that encashment of 50 per cent of pension money by government servants could be made on retirement.
Former national board of revenue chairman Abdul Majid, without any elaboration, said changes in pension system had both positive and negative impacts. 
Since 1995, the government had been permitting 100 per cent encashment of pension money by its employees in one go.
One of the major reasons for halving the encashment of the pension benefit is to reduce liability on payment of pension and bring more flexibility in budget management. 
The officials said that abolition of the provision allowing 100 per cent encashment of pension money would annually save the exchequer between Tk 800 crore and Tk 1,000.
According to a calculation by the finance ministry, the government spent Tk 10,000 crore on pension and gratuity payments in fiscal 2015-16. 
On implementation of the new national pay scale from January 2017, the government expenditures on pension and gratuity increased by 65 per cent to Tk 16,916 crore.
Former director general of Bangladesh Institute of Development Studies MK Mujeri said freedom of choice of the pensioners was compromised by the introduction of 50 per cent encashment pension money. 
He said many pensioners would not be able to go for higher investment.
In 2015, over 30,000 government servants went into retirement and 4,106 of them encashed 100 per cent of their pension money.
Defending the decision 50 per cent encashment of pension money, finance minister AMA Muhith had stated that retired public employees cashing 100 per cent pension were losers.
He noted that pension was always security for a retired employee. 

News Courtesy: www.newagebd.net