Retirement security through provident funds: a Bangladesh USA comparison

Abstract

This report explores retirement security through provident funds by comparing the systems of Bangladesh and the United States. The objectives were threefold: to understand the structure and functioning of provident fund systems in both countries, to identify similarities and differences, and to recommend reforms for Bangladesh based on U.S. best practices. The methodology relied on secondary data from legislative documents, financial reports, and expert opinions. Key findings reveal that while the U.S. system is well-regulated, inclusive, and diversified—offering plans like 401(k), Roth contributions, and employer matching—the Bangladeshi system is largely limited to public sector employees, with minimal private sector regulation and coverage. The research highlights Bangladesh's lack of retirement planning for private and informal sector workers, inadequate legal frameworks, and limited fund portability. In contrast, the U.S. system provides legal protection, tax benefits, portability, and financial transparency. Recommendations include adopting defined contribution plans, allowing voluntary contributions, improving legal oversight, and providing digital access and financial literacy programs. These reforms are essential to build a sustainable and inclusive retirement system in Bangladesh.