By Aggrey Baba
Aiming at securing the future of Uganda’s public servants, Parliament on Tuesday passed the Public Service Pension Fund Bill, 2024.
The new law introduces a contributory pension scheme, requiring civil servants to contribute 5% of their salaries, while the government will top up with a 10% contribution.
This marks a shift from the current system, which is fully funded by the government and has been deemed unsustainable due to rising costs. In the 2021/2022 financial year alone, pension payments reached UGX 2.868 trillion, and projections indicated that the figure could rise to UGX 14.56 trillion by 2053 if reforms were not made.
Public Service Minister Muruli Mukasa presented the Bill, which was unanimously passed by MPs.
Attorney General Kiryowa Kiwanuka clarified that public servants with five years or less until retirement could choose to stay on the old system or switch to the new one. Those who leave government service before retirement will be entitled to their contributions.
To save civil servants from salary reductions due to the 5% contribution, the government is considering a 5% salary enhancement. The law also ensures that dismissed employees will still receive their saved pension contributions.
However, some groups, including the armed forces and elected officials, will be exempt from the scheme. A Board of Trustees will be established to manage the fund, ensuring compliance with regulations and proper oversight.
With the President’s assent, the new scheme is expected to gradually replace the current pension system, marking a major step towards financial sustainability in Uganda’s public service. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
