Uganda Civil Servants to Contribute 5% to Pensions Under New Act

Uganda’s pension system for public servants is undergoing a major overhaul with the enactment of the Public Service Pension Fund Act 2025. Previously, civil servants relied solely on government funding for retirement, but now they must contribute 5% of their salaries, matched by 10% from the government.

This reform aligns the public sector with the private sector’s National Social Security Fund (NSSF) model, promoting sustainability and reducing the financial burden on the state. Rita Nansasi Wasswa, accounting officer at the Uganda Retirement Benefits Regulatory Authority (URBRA), described the change as a pivotal transformation from non-contributory to contributory schemes.

Finance Minister Matia Kasaija highlighted the shift as a milestone, creating a pre-funded system for predictable benefits and broader pension coverage under URBRA oversight. Regulations are being developed to implement the framework, potentially including retirement bonds for managing liabilities.

The move addresses rising pension costs amid fiscal challenges. URBRA’s 2026 report shows the sector’s investment income rose 12% to Shs3.89 trillion by June 2025, though foreign exchange losses persist due to shilling appreciation.

Uganda lags behind Kenya and Tanzania in pension coverage but is strengthening regulations and eyeing informal sector inclusion to boost savings. Pensions already form 67% of gross domestic savings, supporting ambitions to grow the economy tenfold by 2040.

No specific implementation timeline has been announced.

Source: Daily Monitor (Uganda)