Uganda’s New Pension Scheme: What Public Servants Need to Know

Uganda is changing the way public servants will save for retirement, with a new pension system that will require both employees and the Government to make monthly contributions.

Under the new Public Service Pension Fund, public servants covered by the new arrangement will contribute 5% of their basic salary, while Government will contribute another 10%. Together, that means 15% of a public servant’s basic salary will go towards their pension each month.

However, the change will not start immediately. Contributions are expected to begin on July 1, 2027, with Government currently preparing public servants through registration, sensitisation and verification of employment records.

Under the previous public service pension system, public servants did not make regular pension contributions from their salaries. Government was responsible for meeting pension obligations when employees retired.

The new system changes this by creating a contributory and funded pension arrangement, with contributions coming from both the employee and Government.

For example, a public servant earning a basic salary of Shs2 million would contribute Shs100,000 per month. Government would add Shs200,000, bringing the total monthly contribution to Shs300,000. The money will be accumulated and invested through the new pension fund to help provide retirement benefits.

One of the questions many public servants may have is what happens to pension benefits they have already earned.

The reforms provide for the preservation of pension rights accumulated under the old system. Government will continue to meet obligations relating to benefits earned under the previous arrangement.

In simple terms, pension benefits already earned will not simply disappear because of the new system. The benefits accumulated under the old arrangement will be treated separately from those earned under the new scheme.

The new arrangement mainly applies to public servants below the specified age threshold. Those aged 55 and below will generally move into the new pension arrangement, while those aged 55 and above will have the option to remain under the existing arrangement or join the new Fund, subject to the provisions of the law.

The normal retirement age for public servants remains 60 years.

Government is also asking public servants to update their employment records ahead of the transition. This includes information such as date of birth, date of first appointment, salary, job title and expected retirement date.

For employees, this is more than routine paperwork. Accurate records will help determine the benefits a public servant has already earned and ensure the correct information is used when calculating retirement benefits.

For now, public servants do not need to worry about the 5% contribution appearing on their salaries immediately. The contribution phase is expected to begin in July 2027.

Until then, employees are being encouraged to participate in registration and sensitisation exercises and make sure their employment and personal records are accurate.

The new pension system represents a significant change in how Uganda finances retirement for public servants. For employees, the most visible change will eventually be the 5% contribution from their basic salary, but Government will contribute twice that amount, at 10%, creating a system in which both the employee and employer contribute towards retirement.