Uganda Introduces New Pension Bill: What It Means for Civil Servants

Uganda’s government has introduced the Public Service Pension Fund Bill 2024, aimed at reforming pension management for civil servants. The new Bill shifts from a non-contributory pension scheme to a contributory system.

Under the new Bill, each civil servant will be required to contribute 5% of their monthly gross salary to the pension fund, while the government will contribute 10%. This is similar to the scheme run by the National Social Security Fund. The contributions will be deducted by accounting officers in ministries, departments, and agencies, as well as local governments.

Accounting officers who fail to remit civil servants’ contributions to the pension fund will face a penalty equivalent to 1.5% of the amount contributable by each civil servant. The penalty will be imposed until the amount is remitted.

The new contributory pension scheme aims to ensure affordability, sustainability, and good governance. The scheme will provide for the timely payment of retirement benefits and will not depend on budget allocations from the government. This means that pensioners will not be affected by budget cuts.

The Bill proposes a qualifying period for pension of at least 10 years of continuous service in a pensionable service. However, employees who have not served for 10 years may qualify for pension in certain circumstances, such as retrenchment, abolition of office, or retirement on medical grounds.

Aaron Mugaiga, the secretary general of the Uganda Professional Science Teacher’s Union, has welcomed the proposed scheme, but cautioned that it should be implemented well. He suggested that the scheme should focus on new public servants and those earning above a certain threshold.

The government plans to roll out the new pension scheme in the 2025/2026 financial year. In preparation, the government will focus on pre-reform activities, such as developing and managing a database, as well as sensitization. The new scheme is expected to be fully operational by the 2026/2027 financial year.

While there are concerns about implementation, the benefits of the new scheme are clear, and it is expected to provide a more sustainable and secure retirement package for civil servants.

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