Parliament: The government is working towards introducing a participatory universal pension system for all under the government support.

Finance Minister AMA Muhith said this explaining that the government pensioners are but a small fragment of the country's entire population.

"The underlying goal of all these activities is to transform Bangladesh into a welfare state," he said while placing budget for the fiscal year 2017-2018 in Parliament on Thursday.

He said the government is committed to introducing a modern, updated and nondiscriminatory system of pension by reforming the existing one.

"In the first phase of reforming the existing pension system, we have abolished the system of encashment of 100 percent pension, introduced the system of maintaining pension-related budget centrally under Finance Division instead of distributing among different ministries, and taken imitative to establish a separate pension office," Muhith told the House.

From July 1, a government pensioner will receive gratuity on the half of his/her pension and the remaining half will be disbursed as monthly pension for the rest of his/her life.

In the previous system, the amount of pension once fixed was not revised until the announcement of a new pay scale leading pensioners to receive pension at a very low rate.

"For the first time, we have introduced an annual increment of 5 percent on pension money, which will remove the existing disparity among pensioners in the one hand, and enable pensioners to sustain their living standards in the face of inflation," Muhith said.