Universal Pension Scheme (UPS) is an opportune and pro-people move of the government looking to ensure inclusive and sustainable social safety net for the greater socio-economic development. The move will create a new era in the economic history of Bangladesh.

UPS offers four types of people-friendly packages -- Pragati, Surokkha, Samata and Prabashi -- targeting different communities, especially private sector employees, non-resident Bangladeshis, informal sector and low-income group of individuals.

This scheme can also bring in almost large number of people of the society under its net. The option of 50 percent contribution by the government to the insolvent depositors under the "Samata" scheme is a remarkable move.

In the given global economic meltdown and fiscal austerity, UPS will augment the financial flow in the economy. This scheme is expected to benefit the vulnerable citizens with social security, reducing poverty and social safety cost in national budget in future.

The initiative is result-oriented and rewarding not only for the mass welfare but also for the best interests of the private sector. The robust scheme is expected to rationalise the public sector bank borrowing and make new financing streams to meet the evolving fiscal needs of the government.

It may also help smoothen the private sector credit flow and reduce foreign borrowing to some extent, resulting in a hike of the investment-to-GDP ratio. Alongside, this may also help make the cost of fund for the private sector very competitive among different financing options.

The scheme is likely to support the huge number of employees working in conglomerates as well as micro, small and medium enterprises in the private sector. It will help retain jobs, increase the productivity of employees, and provide safety net to the elderlies.

Many economies such as the Netherlands, Denmark, Germany, Australia, India, Canada, Iceland and Switzerland have successfully implemented this sort of scheme to safeguard the welfare of their mass people. The replication of operational and safety learning from these countries may help the new scheme perform as a game-changer for our much-needed economic transformation.

Since the pension scheme is imperative to elevate the income of people for an inclusive economy, we emphasise competitive and secure return for its depositors, good governance and management of this public fund with a view to attracting people and accelerating this timely scheme in the long run.

The author is president of the Dhaka Chamber of Commerce & Industry