Authorities at the Uganda Railways Corporation (URC) have admitted flouting the law during the payment of pension to former workers.
Emmanuel Iyamulemye, the acting chief executive officer, on Thursday told MPs that the corporation did not follow the Pensioners Act in computation of pension.
He also said it pays ex-workers only 40% of what they are entitled to because, "it is what we can afford."
Iyamulemye, accompanied by other officials, was appearing before Parliament's public service and local government committee to answer queries following a petition by over 1,000 members of the Uganda Railways Pensioners Association Limited.
Committee chairperson Raphael Magyezi tasked the officials to explain why they terminate payment of pension to persons when they die and why the money paid is less than the actual amount.
Iyamulemye said the East Africa Railways pension regulations that the corporation follows do not provide for payment of pension to dependents.
However, Magyezi quickly pointed out that Section 18 of the Pension Act, binds the corporation to continue paying dependants for another 15 years. When some MPs remarked that Iyamulemye and his staff were making inconsistent and contradictory statements, he was put under oath.
Upon further interrogation Iyamulemye said: "When the pensioner dies we stop paying. This, I appreciate, isn't in full compliance of the Pension Act. We didn't know that the regulations we have been using are in contravention of the Pension Act.
"This matter has never been brought to us by the pensioners and our assumption was that they agreed," he added.
Magyezi said: "We take it that management has admitted. This is a serious violation of the law."
Court in December 1983 directed that the corporation pays at least 60% pension, but Iyamulemye said that was also out of reach for URC.
He told MPs that URC pays sh120m in pension from its recurrence budget each month. He said since former finance minister Syda Bbumba directed URC to transfer its land at Nsambya to Uganda Land Commission, the corporation has never been paid the sh69b for the land as promised. MPs resolved to summon officials of the Privatisation Unit and the URC Board over queries of non-compliance of the law.