Kampala — THE Government has released sh50b pension arrears to 4,735 beneficiaries. The money will cover teachers, UPDF soldiers and widows, local government workers and traditional civil servants.

Although sh186b was budgeted for pension arrears during this financial year, the outstanding amount is sh860b, according to the public service minister and Second Deputy Prime Minister Henry Kajura.

The existing public service pension scheme is non-contributory, and covers workers from the traditional civil service, teachers, military pensioners, widows, orphans and former employees of the defunct East African Community, and army veterans from past regimes recognised through the Uganda Peoples' Defence Forces Act of 2005.

Payment of pension arrears has been a challenge for the Government. As of March 2007, there were a total of 44,000 civil service sector pension beneficiaries and the pension arrears accumulated had reached about sh289b. Now the pension arrears have shot up to an astronomical sh860b.

While the Government's efforts to clear the pension arrears are commendable, it is obvious the arrears are unlikely to be cleared in the next few years unless the Government quadruples the resources allocated to pension payments.

The Government is faced with a serious dilemma. It cannot drastically increase money for payment of pension arrears without diverting resources from other sectors. At the same time, if additional resources are not mobilised quickly the arrears will rapidly increase and become unmanageable as more people retire.

The Government must quickly implement pension sector reforms before the situation gets out of hand. The existing public service non-contributory pension scheme is unsustainable and dangerous to both the pensioners and the Government.

The reforms should seek to establish an efficient national pension system that guarantees prompt payment of decent pension to both the public and private service pensioners.

The existing pension system is a nightmare for pensioners as it is characterised by, among other things, delayed payments of benefits and low value of actual pension packages.