Uganda’s public servants will begin contributing towards their retirement benefits for the first time under a newly established contributory pension scheme, bringing to an end the country’s long-standing government-funded pension system.
The Ministry of Public Service unveiled the implementation roadmap for the Public Service Pension Fund (PSPF), which is expected to transform how retirement benefits for civil servants are financed and managed.
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Under the new arrangement, employees in the public service will contribute five percent of their monthly salary to the pension fund, while the government will contribute an additional 10 percent as the employer.
Implementation of the scheme will begin with a one-year transition period starting in 2026, before mandatory contributions officially commence on July 1, 2027.
Speaking during the announcement, the Minister for Public Service, Gen. Katumba Wamala, described the pension fund as one of the most significant reforms in Uganda’s public service, saying it is designed to improve retirement security while ensuring greater efficiency in pension administration.
“This is one of the major reforms in the public service sector, and it is intended to benefit all civil servants. The implementation process will begin next year,” Gen. Katumba said.
For decades, Uganda’s civil servants have been covered under a non-contributory pension arrangement established by the Pensions Act, under which the government has financed gratuity payments and monthly pensions directly from the Consolidated Fund.
While the system guaranteed retirement income, it did not generate investment savings, resulting in growing pension liabilities and frequent delays in paying retirees as the number of beneficiaries continued to increase.
The introduction of the Public Service Pension Fund follows the enactment of the Public Service Pension Fund Act, 2025, which replaced the old unfunded model with a contributory scheme supported by both employees and government.
The new law establishes a dedicated pension fund that will operate in a manner similar to the National Social Security Fund (NSSF), which manages retirement savings for workers in the private sector.
According to the Uganda Retirement Benefits Authority, the country currently has about 334,146 serving civil servants and 64,855 pensioners.
Figures presented to Parliament indicate that during the 2021/2022 financial year, annual pensionable salaries stood at approximately Shs2.8 trillion, while government spent about Shs3.1 trillion on pension payments.
Gen. Katumba said the governing board of the new pension fund has already been constituted and is working to establish the administrative systems, operational structures and investment framework required before the scheme becomes fully operational.
He noted that one of the expected benefits of the reforms is the timely processing of retirement benefits, enabling pension payments to be ready immediately after an officer retires.
The contributory scheme will apply to public officers employed on permanent and pensionable terms, including staff in ministries, local governments, the education and health sectors, as well as personnel serving in the Uganda Police Force and Uganda Prisons Service.
Permanent Secretary at the Ministry of Public Service, Catherine Bitarakwate Musingwiire, assured civil servants that the new arrangement should not be viewed with concern, explaining that employees’ contributions will be remitted directly by the Ministry of Finance to the Public Service Pension Fund.
She added that members’ savings will be professionally invested, allowing contributors to earn returns over the course of their employment and potentially increase the value of their retirement benefits.
The ministry further clarified that retirees already receiving pensions under the current arrangement will continue to receive their gratuity and monthly pension from the Consolidated Fund and will not be affected by the transition.
For officers currently serving who will migrate to the new scheme, government said pension rights already earned under the previous system will be preserved through a Government Retirement Bond, which will be paid upon retirement.
To facilitate a smooth transition, the Ministry of Public Service has directed accounting officers and human resource managers to update employee information on the Human Capital Management System, including National Identification Numbers, dates of birth and dates of first appointment.
The updated records will support the registration of members into the new pension fund and enable government to determine accrued pension obligations.
Accounting officers have also been instructed to make budgetary provisions in the 2027/2028 financial year for both the government’s 10 percent contribution and the employees’ five percent deductions.
In addition to the pension reforms, the ministry directed government agencies, commissions and statutory bodies to harmonise their human resource policies with national public service standards.
The ministry said no new human resource policy will take effect without review by the Public Service Commission, technical clearance from the Ministry of Public Service, legal approval by the Ministry of Justice and Constitutional Affairs, and final approval by Cabinet.
Existing human resource manuals, the ministry added, must be submitted for verification and harmonisation within 30 days beginning July 1, 2026.
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