New Public Service Pension Scheme to require 5% employee, 10% government contributions
Under the new system, contributions made during a member’s working years will be invested in accordance with the law to support the payment of retirement benefits.
New Public Service Pension Scheme to require 5% employee, 10% government contributions
The Government is preparing to transition public servants to a new contributory Public Service Pension Scheme, with employees expected to contribute 5% of their basic salary while Government contributes 10%, effective July 1, 2027.
The new arrangement, established under the Public Service Pension Fund law, will operate as a hybrid defined-benefit scheme, retaining the existing pension formula for determining retirement benefits while introducing regular contributions and investment of members’ savings.
The scheme will cover public servants in traditional government service, local governments, the teaching service, Uganda Prisons and government agencies that are not already covered by another pension scheme.
Who will join the scheme?
Public servants below 55 years will be eligible to join the new scheme, while those aged 55 and above will have the option of joining or remaining under the existing arrangements.
The reform is intended to address longstanding challenges associated with the non-contributory pension system, including delays in pension payments and concerns about ensuring that retirement benefits are adequately funded.
Under the new system, contributions made during a member’s working years will be invested in accordance with the law to support the payment of retirement benefits.
Existing pension rights protected
Government has assured public servants that pension rights accrued before the new scheme takes effect will be protected.
Employees already in public service before July 1, 2027 will have their past service accounted for, with Government retaining responsibility for obligations arising from service rendered before the new arrangement comes into force.
The scheme will also provide contribution-based benefits for members who leave public service before qualifying for retirement.
Public servants who have made contributions but do not qualify for a pension, including those who resign, will be able to access their qualifying contributions in accordance with the scheme’s provisions.
Retirement age remains at 60
The reform will not change the current retirement age of 60 years, while existing modes of retirement and the pension formula used to calculate retirement benefits will also remain unchanged.
Qualifying retirees will continue to receive pension payments for life. In the event of a pensioner’s death after retirement, eligible beneficiaries will continue to receive benefits in accordance with the law.
Government is now urging responsible officers in public institutions to prepare for the transition by updating and transferring employee records, undertaking data clean-up and ensuring that institutional budgets provide for the required 5% employee and 10% employer contributions.
The Ministry has also called for continued sensitisation of public servants and encouraged institutions to provide staff with opportunities to attend information sessions on the reforms.
“It is your pension, it is your gratuity, and you are the beneficiary,” the Ministry told public servants, stressing the importance of understanding the new arrangements.
The Government expects the new Public Service Pension Scheme to strengthen retirement security, improve the sustainability of pension financing and ensure that public servants receive their benefits when they become eligible.
