10 December 2018

Uganda: Govt Creates New Pension Scheme for Civil Servants

Kampala — Civil servants are expected to get a 5 per cent salary increment next year but the money will be remitted as their savings to the new contributory pension scheme the government has introduced.

Speaking at their offices in Kampala on Thursday, Mr Wilson Muruli, the Minister of Public Service, revealed that a Bill to introduce a contributory pension scheme has been drafted.

"Some of the reforms are an introduction of a contributory pension scheme in the public service to address issues of affordability, sustainability, poor governance, accountability and timeliness of gratuity payment," he said.

The Bill, he said, is currently awaiting approval by Cabinet and thereafter be enacted by Parliament by July 2019.

Contrary to the existing system where public servants are paid their pension only from government contributions upon their retirement, the new contributory scheme means that in addition to government contributions, public servants will also be required to contribute to their retirement benefits during the time they are still employed.

How the scheme will work

According to Mr Allan Muhereza, the assistant commissioner for human resource management at the Public Service ministry, the government decided to increase the public servants' salaries by 5 per cent in order to cushion them from the pension deductions. The contributory scheme will be managed by a board and structure independent of government and National Social Security Fund.

However, retired officers who are already receiving their pension and those left with only five years to retire will remain on the current benefits scheme where they only receive government contributions.

Those who have many years to retirement, government will compute the benefits accrued in the current scheme and convert them into government securities such as treasury bonds. The bonds will then be added to the benefits from the contributory scheme upon the public servant's retirement. To reduce the time pensioners receives their benefits and to eliminate ghost employees from the payroll, a new system aimed at automating and digitising government data dubbed the 'Integrated Payment Personnel System has been linked to the Integrated Financial Management System .

Many public servants, especially in local governments, have not received their salaries since July.

The delay was attributed to the Programme Budgeting System introduced by Ministry of Finance and the migration of 59 local governments from the old to the new payment system.

Even then, Mr Muruli said, 12,723 public officers are yet to receive their salaries because they lack Supplier and Tax Identification Numbers.

However, he said through engagement with Uganda Revenue Authority, the ministry expects the officers to receive payment by December 28.

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