Nearly 99% of readymade garment (RMG) workers are uninterested in the Universal Pension Scheme (UPS), according to a recent survey.
The study has found that only 1.3% of workers have so far enrolled in the scheme, which was introduced in August 2023.
Financial constraints were the primary reason for non-participation, cited by 90.6% of workers, while 6.7% expressed concerns over the scheme’s long-term sustainability. Additionally, 2.7% of workers were unaware of the UPS.
The survey was conducted by Md Monirul Islam, deputy director of the Bangladesh Institute of Labour Studies (BILS).
With support from the Netherlands-based organization Mondiaal FNV, the Bangladesh Institute of Labour Studies (BILS) is implementing a project titled “Ensuring Decent Work in the Ready-Made Garment (RMG) Sector through Social Dialogue.”
As part of this initiative, BILS conducted a study between September and December 2024, titled “Universal Pension Scheme: Exploration of Potential Scopes for RMG Workers’ Social Protection in Bangladesh.”
The study findings were presented today (17 February) at a roundtable discussion held at Sromo Bhaban in the capital, organized by BILS.
It is worth noting that the government has introduced four types of Universal Pension Schemes, among which the Progoti scheme allows for the inclusion of RMG workers. Under this scheme, contributions are equally shared, with 50% paid by workers and 50% by employers.
The study primarily focused on the RMG sector with several key objectives. It aimed to evaluate the government-declared Universal Pension Scheme (UPS) in Bangladesh. Additionally, it analyzed the potential benefits, structure, process, and mechanisms of the UPS to ensure social protection for RMG workers while identifying existing gaps.
The study also reviewed national and international policies and initiatives, highlighting best practices regarding employer contributions to social protection for RMG workers. Lastly, it proposed a model Universal Pension Scheme tailored for RMG workers in Bangladesh and provided effective recommendations for sustainable measures, according to BILS.
Addressing the round table discussion Razequzzman Ratan said the main issue is financial capacity, as workers are currently struggling and have no time to think about the future.
“If it can be successfully implemented, it will create an annual fund of Tk4,048 crore,” he added.
Advocate AKM Nasim said, “The management process must be transparent; otherwise, workers will not benefit—only the fund managers will.”
“A major concern is how much workers are willing to contribute to this fund, as in some cases, it may require about one-fifth of their wages,” he added.
“Initially, the scheme could be started with contributions from the government and employers to build workers’ confidence.”
Abul Kalam Azad, Joint Secretary of the Bangladesh Trade Union Centre (UTC), said, “When employers themselves are becoming bank defaulters, how can workers have confidence in them? There is a fundamental issue of trust.”
Saidur Rahman, deputy secretary of the Labour Ministry, said there is a lack of job security in Bangladesh. “That’s why UPS could help address this issue.”
“We should provide support to make it popular among workers,” he added.
Sakiun Nahar Begum, additional secretary of the Department of Labour, said that over 70% of workers are unwilling to participate in this project due to a lack of trust.
“I don’t think there is any evidence to suggest that this is the outcome of a government study,” she said.
She further added, “We need to identify some gaps that can be addressed in the future.”
Referring to an EU fund for RMG workers’ social protection after the Covid pandemic she said due to a lack of proper documentation the fund remains unused, despite several attempts.
For UPS such formal documentation will be required, she added.
