Parliament has handed the Public Service Pension Fund Bill, 2024 that may see public servants contribute 5 per cent of their salaries to the pension scheme.
The Bill which was launched for Second Reading by the Minister of Public Service, Hon. Muruli Mukasa on Tuesday, 25 February 2025 introduces a contributory pension scheme designed to make sure a sustainable funding supply for pensioners.
According to a report on the Bill introduced by the Chairperson of the Committee on Public Service and Local Governments, Hon. Ojara Mapenduzi, Uganda at the moment operates an unfunded, non-contributory, outlined profit pension scheme for public servants beneath the Pensions Act, which was enacted in 1946.
The Act grants and regulates pensions and gratuities for public service officers.
“The present system offers retirees with a lump sum upon retirement and a month-to-month pension based mostly on a fraction of their final pensionable wage. However, actuarial research have indicated the necessity for pressing reforms”, he mentioned.
The committee additionally famous that globally, most pension schemes are transitioning to contributory techniques. The Bill proposes that the general public servants will contribute 5 per cent with authorities topping up with 10 per cent.
The Bill additionally offers for pension advantages for public servants who’re dismissed from workplace stating that their advantages as much as once they lose their jobs needs to be paid.
The Ministry of Public Service and different stakeholders beneficial a 5 per cent wage enhancement throughout the board to offset the deductions.
“The authorities ought to prioritize wage enhancements to make sure that deductions don’t adversely affect staff’ take-home pay. Additionally, wage revisions are essential to deal with the low wages of public servants and the numerous pay disparities throughout totally different job classes,” the committee report beneficial.
The report additionally highlighted that the brand new scheme is anticipated to extend nationwide financial savings and supply a supply of inexpensive long-term financing, primarily for personal sector funding, thereby stimulating financial development.
Clause 8 of the Bill offers for the institution of a Board of Trustees, appointed by the minister with Cabinet approval.
“The Board will embody representatives from the Ministries of Finance, Labour, Public Service and Local Government together with public service labour unions and three technical consultants from related fields,” the Bill proposes.
Erute South Representative, Hon. Jonathan Odurproposed that the Bill will allow the federal government get better dues from pensioners who default on obligations.
“To run a authorities successfully, residents should fulfill their obligations. If you may have monetary obligations, similar to unpaid taxes, they have to be settled,” he acknowledged.
Aringa North MP, Hon. Godfrey Onzima opposed the proposal to permit authorities connect the pension of an worker who has didn’t pay taxes.
“The Bill is speaking about contributions. When you do this, the cash ceases to be yours and so authorities can not take that simply because I owe it taxes,” he mentioned.
Tororo District Woman Representative, Hon. Sarah Opendi cautioned the committee towards limiting the fund to solely public servants saying a financial savings tradition needs to be inspired. She proposed that extra residents needs to be given the freedom to avoid wasting with the fund.
“When we had been processing the NSSF Bill, we opened it up. So reasonably than prohibit it after which we come again to amend, we should always let it’s open to all,” she mentioned.
The Attorney common, Hon. Kiryowa Kiwanuka guided that the concept for this scheme is that there shouldn’t be a public servant who is just not saving.
Speaker Anita Among mentioned that individuals in elective positions, members of armed forces, staff of safety organisations and are public servants who’re already subscribing to their very own establishments don’t should be on this scheme.
According to the 2022 actuarial examine, Uganda had 334,146 civil servants and 64,855 pensioners.
In the 2021/2022 monetary 12 months, the full annual pensionable emoluments amounted to Shs2.8trillion whereas annual pension funds totaled Shs3.1trillion.
