Parliament has handed the Public Service Pension Fund Bill, 2024 that can 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 offered by the Chairperson of the Committee on Public Service and Local Governments, Hon. Ojara Mapenduzi, Uganda at present operates an unfunded, non-contributory, outlined profit pension scheme for public servants underneath 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 stated.
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 after they lose their jobs ought to be paid.
The Ministry of Public Service and different stakeholders advisable 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 impression staff’ take-home pay. Additionally, wage revisions are vital to handle the low wages of public servants and the numerous pay disparities throughout totally different job classes,” the committee report advisable.
The report additionally highlighted that the brand new scheme is predicted to extend nationwide financial savings and supply a supply of reasonably priced 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 well dues from pensioners who default on obligations.
“To run a authorities successfully, residents should fulfill their tasks. If you’ve monetary obligations, reminiscent of unpaid taxes, they should 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’t take that simply because I owe it taxes,” he stated.
Tororo District Woman Representative, Hon. Sarah Opendi cautioned the committee towards proscribing the fund to solely public servants saying a financial savings tradition ought to be inspired. She proposed that extra residents ought to be given the freedom to save lots of with the fund.
“When we had been processing the NSSF Bill, we opened it up. So slightly than prohibit it after which we come again to amend, we must always let or not it’s open to all,” she stated.
The Attorney normal, Hon. Kiryowa Kiwanuka guided that the thought for this scheme is that there shouldn’t be a public servant who isn’t saving.
Speaker Anita Among stated 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 yr, the whole annual pensionable emoluments amounted to Shs2.8trillion whereas annual pension funds totaled Shs3.1trillion.
