What Happens to Teachers' Contributions if the Welfare Trust is Dissolved?

What Happens to Teachers’ Contributions if the Welfare Trust is Dissolved?

The government plans to include private MPO-listed teachers under a universal pension scheme starting in July. This has raised concerns among educators about the fate of their contributions to the Retirement and Welfare Trust.

Questions are circulating on Facebook groups about what will happen to the money deducted from teachers’ salaries over the past five to ten years or even shorter periods. Teachers are wondering if these funds will be transferred to the universal pension scheme or if the money will be refunded.

To clarify, The Daily Campus spoke with Md. Shahjahan Alam Sajur, Member Secretary of the Private Education Institution Teachers and Employees Welfare Trust. He stated that even if teachers are included in the universal pension scheme, the Welfare Trust’s activities will continue. According to him, there is no plan to dissolve the Welfare Trust, as the funds collected from teachers’ salaries are deposited there. Until these funds are returned to the teachers, the Trust will remain operational. He also mentioned that he had not heard any government plans to dissolve the Trust.

In response to what would happen to the funds if the government decided to dissolve the Welfare Trust, he emphasized that the primary purpose of the Trust is to return the deducted money to the teachers. Therefore, even if the Trust’s operations are eventually discontinued, the teachers will still receive their due funds.

Currently, there are over half a million MPO-listed teachers and staff working in approximately 30,000 private educational institutions across the country. These educators do not receive pension benefits upon retirement. Throughout their careers, 10% of their salaries are deducted for the Retirement and Welfare Funds—6% goes to the Retirement Board and 4% to the Welfare Trust. However, teachers and staff often face numerous hassles when trying to withdraw this money after retirement. To address this issue, the government is moving to include teachers in a pension scheme, which would render the current Retirement and Welfare Trust operations redundant.

According to sources, the Welfare Trust receives an average of 16,800 to 17,000 applications per year, requiring 7.2 billion BDT to process. Meanwhile, the Retirement Benefits Board handles around 10,800 applications annually, needing 13.2 billion BDT. Both funds face a combined annual shortfall of 5.7 billion BDT. Additionally, approximately 67,000 pending applications across both boards require 65 billion BDT to clear.

Due to this funding crisis, many teachers and staff do not receive their entitled benefits for three to four years post-retirement. In response, the High Court ruled on February 22nd that financial and retirement benefits for MPO-listed teachers and staff must be provided within six months of retirement.