KAMPALA – Public servants have been notified of far-reaching pension reforms under the Public Service Pensions Act, introducing a contributory scheme designed to secure sustainable and adequate retirement benefits for eligible employees.
Thank you for reading this post, don't forget to subscribe!The reforms were unveiled in a statement by the Ministry of Public Service’s Department of Compensation during the joint Wage, Pension and Gratuity Harmonisation Exercise for Ministries, Departments and Agencies (MDAs) and Local Governments for the Financial Year 2026/2027.
Under the new arrangement, public servants will contribute 5% of their monthly salary, while the Government contributes 10% bringing the total to 15%. The shift marks a major departure from the long-standing non-contributory pension system.Participation in the new contributory scheme is mandatory for all public servants below the age of 55.
However, the Act provides a flexible transition for senior employees: those aged 55 years and above may either remain under the existing pension arrangement or voluntarily join the new scheme.
Addressing concerns about accrued rights, officials from the Ministry of Public Service emphasised that benefits already earned under the current pension system will be fully preserved.
The development guarantees that no public servant will lose the value of the service and benefits earned before the new Act was implemented, ensuring that everyone’s past contributions remain fully protected.
The 2025 Act introduces several key provisions aimed at enhancing the welfare of public servants. Notably, it establishes a minimum pension, ensuring a safety net for retirees. The Act also permits the investment of contributions, a move intended to grow the pension fund and secure its financial future.
In addition, the legislation provides for continued pension benefits for eligible members who leave public service under specified circumstances, offering greater portability and security for those transitioning out of government roles.
Meanwhile, public servants have been urged to update their biodata and employment records to ensure a smooth rollout of the new system, as accurate data is critical for the precise computation of retirement benefits.
In a statement to the service, representatives encouraged employees to fully participate in the forthcoming registration and sensitization exercises, which will provide further details on the implementation process.
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