Pensions Reform: Civil Servants to Start Mandatory Contributions

2210 Views Kampala, Uganda

In short
The government is exploring ways of having civil servants contribute for their retirement benefits like private sector workers are already doing.

The government is exploring ways of having civil servants contribute for their retirement benefits like private sector workers are already doing.

Finance Minister Matia Kasaija, represented by his junior minister David Bahati, said this today at the launch of a campaign to boost savings for old age in Kampala. The campaign was organised by Uganda Retirement Benefits Regulatory Authority (URBRA).
 
Kasaija said government delays in paying pensioners because, unlike contributory schemes like National Social Security Fund (NSSF), it has no pool of money to draw from in order to pay pensions or gratuity in time.

Presently civil servants, on retirement, are entitled to pensions paid for fully by the state. It is only private sector employees and their employers who contribute to schemes like NSSF and the other 64 formal and informal schemes licensed by URBRA.

The government pensions scheme has been dogged by wanton corruption involving billions of shillings. The government is currently conduction fresh registration of pensioners in order to ascertain the exact number of beneficiaries.
 
The minister said as a result, the government is exploring how civil servants can be made to make a contribution to their pensions.
 
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Minister Kasaija also said the proposed reforms in pensions sector is intended to boost savings and ultimately investments.
 
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The Pensions Reform and Liberalisation Bill has been in parliament for more than six years with forces for and against especially liberalisation of the sector tussling it out.
 
The major opposition is coming from NSSF and some labour unions with their argument being liberalisation would dilute the sector in which NSSF has enjoyed monopoly for over three decades.
 
Kasaija said the government is ensuring that the law is revisited in order to open up the pensions sector.
 
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Speaking in an interview with Uganda Radio Network, the Chief Executive of URBRA, David Nyakundi Bonyi, said he is hopeful that the current parliament will eventually pass the bill opening up the pensions sector.
 
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The Chair of URBRA, Andrew Kasirye said Uganda is now ripe for retirement savings, citing young people below 30 who constitute majority of the workforce.
 
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Despite the pensions sector not statutorily opened, the URBRA has licensed 64 formal and informal retirement benefits schemes.
 
The formal schemes are mainly run by government agencies like Uganda Telecom. There also only two informal schemes that have been license so far - Mazima Trust and Kampala City Traders' Association.
 
Uganda has an estimated 17 million people employed, with about 80 percent of them in the informal sector.
 
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About the author

David Rupiny
In his own words, David Rupiny says, "I am literally a self-trained journalist with over 12 years of experience. Add the formative, student days then I can trace my journalism roots to 1988 when as a fresher in Ordinary Level I used to report for The Giraffe News at St Aloysius College Nyapea in northern Uganda.


In addition to URN for which I have worked for five years now, I have had stints at Radio Paidha, Radio Pacis, Nile FM and KFM. I have also contributed stories for The Crusader, The New Vision and The Monitor. I have also been a contributor for international news organisations like the BBC and Institute for War and Peace Reporting. I am also a local stringer for Radio Netherlands Worldwide.


I am also a media entrepreneur. I founded The West Niler newspaper and now runs Rainbow Media Corporation (Rainbow Radio 88.2 FM in Nebbi). My areas of interest are conflict and peacebuilding, business, climate change, health and children and young people, among others."