Bangladesh's NPA Struggles With Universal Pension Scheme Rollout
The National Pension Authority (NPA) in Bangladesh is facing challenges following the hurried introduction of the universal pension scheme. Economists are unsurprised by the setbacks, as the scheme was launched without feasibility studies. The NPA, established in August 2023, has seen a decline in policyholders, with only 3,72,168 active as of October 11, 2024.
The NPA's struggles can be attributed to several factors. Initially set up with limited resources, the authority has struggled to develop its capacity in key areas. The government's change in August 2024, following Sheikh Hasina's resignation, also contributed to the slowdown in NPA activities. Efforts to increase the client base through countrywide subscriptions have been suspended.
To address these issues, the Asian Development Bank (ADB) has proposed a $100 million loan. The loan aims to strengthen the NPA's institutional, operational, governance, and human resource capacities. This support is crucial for the NPA to successfully manage and operate the universal pension scheme.
The NPA's challenges highlight the importance of thorough planning and feasibility studies before implementing large-scale social welfare schemes. With the ADB's proposed loan, the NPA can now work towards improving its capacity and reversing the decline in policyholders.
