A new pension scheme for civil servants in Uganda has been introduced, requiring them to contribute 5% of their monthly salary to a pension fund. The scheme, which is expected to be rolled out in the 2025/2026 financial year, aims to provide a more sustainable and secure retirement package for civil servants.
According to the Public Service Pension Fund Bill 2024, the 5% contribution from civil servants will be matched by a 10% contribution from the government. The contributions will be deducted by accounting officers in ministries, departments, and agencies, as well as local governments.
The new pension scheme is a significant departure from the current non-contributory pension scheme, which is fully funded by the government. The government hopes that the new scheme will reduce the financial burden of pension payments and provide a more sustainable solution for civil servants’ retirement benefits.
“The current pension scheme is not sustainable in the long term,” said Catherine Bitarakwate, the Permanent Secretary in the Ministry of Public Service. “The new scheme will ensure that civil servants have a secure retirement package and that the government is not burdened with the full cost of pension payments.”
The new pension scheme has been welcomed by some civil servants, who see it as a way to secure their retirement benefits. “I think it’s a good idea,” said Jane Nabatanzi, a civil servant in Kampala. “I want to make sure that I have a secure retirement, and this scheme will help me to do that.”
However, others have expressed concerns about the impact of the scheme on their salaries. “I’m not sure that I can afford to contribute 5% of my salary to a pension fund,” said John Bosco, a civil servant in Entebbe. “My salary is already low, and this will just make it harder for me to make ends meet.”
The government has assured civil servants that the contributions will be deducted from their salaries before tax, which will help to reduce the impact on their take-home pay. The government has also promised to provide education and sensitization programs to help civil servants understand the benefits of the new scheme.
The rollout of the new pension scheme is expected to be phased, with new civil servants being enrolled in the scheme first. Existing civil servants will be given the option to join the scheme, but it will not be mandatory.
The government hopes that the new pension scheme will provide a more sustainable and secure retirement package for civil servants, and will help to reduce the financial burden of pension payments. However, it remains to be seen how the scheme will be received by civil servants, and whether it will achieve its intended goals.
Key Features of the New Pension Fund
Contributions
Civil servants will contribute 5% of their monthly salary to the new pension fund, while the government will contribute 10%.
Deductions
Contributions will be deducted by accounting officers in ministries, departments, and agencies, as well as local governments.
Pension Scheme
The new pension fund will be a contributory scheme, unlike the current non-contributory scheme.
Rollout
The new pension fund is expected to be rolled out in the 2025/2026 financial year.
Benefits of the New Pension Fund
Sustainable Retirement Benefits
The new pension fund aims to provide a more sustainable and secure retirement package for civil servants.
Reduced Financial Burden
The government hopes that the new scheme will reduce the financial burden of pension payments.
Increased Financial Security
Civil servants will have more control over their retirement benefits and can plan for their future with greater certainty.
Who is Eligible?
New Civil Servants
New civil servants will be automatically enrolled in the new pension fund.
Existing Civil Servants
Existing civil servants will be given the option to join the new pension fund, but it will not be mandatory.
Implementation Timeline
2025/2026 Financial Year
The new pension fund is expected to be rolled out.
Pre-Rollout Activities
The government will focus on pre-reform activities, such as developing and managing a database, as well as sensitization.
The new pension fund marks a significant shift in the management of retirement benefits for civil servants in Uganda.
With its contributory scheme and reduced financial burden on the government, the new pension fund aims to provide a more sustainable and secure retirement package for civil servants.
