KAMPALA, February 26, 2025 –– Parliament has passed the Public Service Pension Fund Bill, 2024. The Bill, if signed into law by President Yoweri Museveni, will make public servants in the country contribute five percent of their salaries to the pension scheme.
The Bill which was introduced for Second Reading by the Minister of Public Service, Wilson Muruli Mukasa on Tuesday introduces a contributory pension scheme designed to ensure a sustainable funding source for pensioners.
According to a report on the Bill presented by the Chairperson of the Committee on Public Service and Local Governments, Ojara Mapenduzi, government currently operates an unfunded, non-contributory, defined benefit pension scheme for public servants under the Pensions Act, which was enacted in 1946.
The Act grants and regulates pensions and gratuities for public service officers.
“The current system provides retirees with a lump sum upon retirement and a monthly pension based on a fraction of their last pensionable salary. However, actuarial studies have indicated the need for urgent reforms”, he said.
The committee also noted that globally, most pension schemes are transitioning to contributory systems. The Bill proposes that the public servants will contribute five per cent with government topping up with 10 per cent.
The Bill also provides for pension benefits for public servants who are dismissed from office stating that their benefits up to when they lose their jobs should be paid.
The Ministry of Public Service and other stakeholders recommended a five per cent salary enhancement across the board to offset the deductions.
“The government should prioritise salary enhancements to ensure that deductions do not adversely impact employees’ take-home pay. Additionally, salary revisions are necessary to address the low wages of public servants and the significant pay disparities across different job categories,” the committee report recommended.
The report also highlighted that the new scheme is expected to increase national savings and provide a source of affordable long-term financing, primarily for private sector investment, thereby stimulating economic growth.
Clause 8 of the Bill provides for the establishment of a Board of Trustees, appointed by the minister with Cabinet approval.
“The Board will include representatives from the Ministries of Finance, Labour, Public Service and Local Government along with public service labour unions and three technical experts from relevant fields,” the Bill proposes.
Erute South MP, Jonathan Odurproposed that the Bill will enable the government recover dues from pensioners who default on obligations.
“To run a government effectively, citizens must fulfill their responsibilities. If you have financial obligations, such as unpaid taxes, they must be settled,” he stated.
The Aringa North legislator, Godfrey Onzima opposed the proposal to allow government attach the pension of an employee who has failed to pay taxes.
“The Bill is talking about contributions. When you do that, the money ceases to be yours and so government cannot take that just because I owe it taxes,” he said.
Tororo District Woman MP, Sarah Opendi cautioned the committee against restricting the fund to only public servants saying a savings culture should be encouraged. She proposed that more citizens should be given the liberty to save with the fund. “When we were processing the NSSF Bill, we opened it up. So rather than restrict it and then we come back to amend, we should let it be open to all,” she said.
On his part, the Attorney General, Kiryowa Kiwanuka guided that the idea for this scheme is that there should not be a public servant who is not saving.
Speaker Anita Among advised that persons in elective positions, members of armed forces, and employees of security organisations already subscribe to their own institutional pension schemes and therefore there is no need to consider them in the new pension scheme.
https://thecooperator.news/nssf-procures-new-pension-management-soft-ware/
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