'One grade, one pension' framework delayed by deficit of Tk1,500 crore fund

The long-cherished dream of government employees to implement the "One Post, One Pension" or "One Grade, One Pension" system cannot be realized immediately. The implementation of this system is being postponed due to a lack of employee databases and an additional financial burden of 1,500 crore taka. However, retired employees have received a major relief with the announcement of an increase in net pension by up to 100%. An official from the Ministry of Finance said that the net pension increase has been made effective under the newly announced 9th Pay Scale.

The current government's election manifesto included a promise to introduce the "One Grade, One Pension" system for both military and civilian personnel. Cabinet Secretary Nasimul Gani said that implementing this system would require a huge amount of money. Moreover, there is no necessary data available for civilian employees who retired before 2019. For this reason, a decision has been taken to implement the system by 2030.

According to sources in the Finance Division, implementing the net pension increase will require an additional 5,669 crore taka per year. In contrast, implementing the "One Grade, One Pension" system would cost 1,500 crore taka.

Sources further indicate that the government is currently facing a financial crunch. Implementing the new pay structure will require an additional 1,05,000 crore taka. That is why the government has not taken on the extra burden of another 1,500 crore taka.

Apart from the financial crisis, the government's Integrated Budget and Accounting System (iBAS++) does not retain grade-based information for approximately 7 lakh employees who retired before 2019. Since 2019, work began on creating an EFT (Electronic Funds Transfer) database for pensioners. From the outset, a field for entering grade-based information of pensioners was included in the EFT database, but this field was kept optional. This was done for practical reasons, as most elderly pensioners cannot accurately provide this information. Currently, there are about 2 lakh 60 thousand pensioners above the age of 70. Additionally, family pensioners cannot provide accurate information on this matter; there are about 1 lakh 25 thousand family pensioners. Considering these factors, grade-based information was not made mandatory in the database. As a result, the field was kept optional, and currently, grade-related information is missing from the database of approximately 7 lakh 50 thousand pensioners. For pensioners who retired before 2019, their grade-related information is not available in any database—this number is about 7 lakh. Even with effort, it is not possible to automatically update this information for these pensioners.

The remaining 2 lakh 50 thousand pensioners who retired after 2019 have their information available in the "Employee Fixation Database." However, in some cases, verification will be required before accepting this data. In other words, considering these factors, collecting and updating the information is not feasible.
In total, the grade-related database of about 750,000 pensioners is empty, making it nearly impossible to manually collect information for 950,000 employees due to institutional extinction. Because of this complexity, 'One Post, One Pension' is not being implemented for now. Considering these aspects, there is a plan to launch this system in 2030.

Meanwhile, under the new pay scale, the net pension for low-income retirees has been increased by up to 100% (minimum 10,000 taka), and the commutation rate has been raised to 1:295. This has brought some relief to pensioners.

For pensions ranging from 9,001 taka to 20,000 taka: increased by 75%. In this case, the minimum net pension will be 18,000 taka.

For pensions ranging from 20,001 taka to 30,000 taka: increased by 65%. The minimum net pension here will be 33,000 taka.

For pensions ranging from 30,001 taka to 40,000 taka: increased by 60%. The minimum net pension will be 49,000 taka, though it will not exceed the pension of retirees in Grade No. 1 of the new pay scale.

For pensions of 40,001 taka and above: increased by 55% (minimum net pension will be 62,000 taka; the upper limit of Grade No. 1 applies).

When asked about the matter, former Senior Finance Secretary Mahbub Ahmed told Agamir Somoy that it would be good if the One Grade, One Pension system could be introduced. Because under the current system, pension amounts are not equal between government officials who retired earlier and those retiring now from the same post. If the new system is introduced, old pensioners will be able to enjoy the same benefits as new ones, eliminating discrimination among pensioners.

Sources at the Ministry of Finance say that many countries around the world have already moved away from 'defined benefit' systems and introduced 'defined contribution' funded pension schemes. Among them, in 2003, Sri Lanka introduced an 8% employee and 12% government contribution. In India, a system based on a 10% employee and 10% government contribution has been introduced, and since 2025, it has been modernized under the UPS (Unified Pension Scheme) system. Similarly, in Pakistan, government employees contribute 10% and the government contributes 12% to the fund. In Australia, under the Superannuation system, 12% is mandatorily deposited into the fund, which is regarded as one of the most successful models worldwide.

However, in the country, there are approximately 1.4 million active government employees against about 900,000 retirees. Since it is an unfunded, defined-benefit system, the entire pension has to be paid out from government revenue. With roughly 4.5% new pensioners being added each year and the average lifespan of retirees increasing, providing this benefit for over 20 years has created intense financial pressure on the budget. In just the first six months of the current 2025–26 fiscal year, the government has already had to pay out 12,335 crore taka in the pension sector. Once the new pay scale is fully implemented, this expenditure is projected to reach 50,684 crore taka by the 2029–30 fiscal year.