PENSIONS
Pension refers to an arrangement whereby regular periodic payments (usually monthly), like a
wage or salary are made to an aged (old) member for some defined period or to dependants
upon the member’s death. Pensions are for public service. The Pensions Act Cap 286 is the
major statutory source for providing for the grant and regulation of pension, gratuities and other
allowances in respect of public officers / employees of the government. Section 21 of the Act
makes provision for the application of the Act and it applies to officers in the government service
after the 9th August, 1948, otherwise than on transfer from other public service;
(b) to every teacher appointed to the Teaching Service on or after the 1st day of July, 1953;
(c) to every officer in the service of the administration of a district, and to every such officer who
was in the service—
(i) in the case of service in the former Buganda Government, on or after the 1st day of January,
1954;
(ii) in the case of service in the former Eastern, Western or Northern Province, on or after the
1st day of January, 1950;
(d) to an officer serving in an urban authority who is a member of a pension scheme established
by the urban authority in which he or she is serving who, from the date the pensions authority
may determine, opts to be subject to this Act;
(e) to every officer appointed to the service of an urban authority on or after the date the
pensions authority may determine;
(f) subject to the Second Schedule to this Act, to every officer
(i) transferred to the service of the
Government after the 9th August, 1948, from other public service;
(ii) in the service of the Government prior to the 9th August, 1948, who, in accordance with the
Government Secretariat Circular No. 29 of 1948, of the 1st September, 1948, elected or is
deemed to have elected for the new terms of service contained in that circular and any
amendments to it;
(iii) transferred from the service of the Government to other public service before the 1st
January, 1946, who retires from the public service subsequent to that date;
(g) to every officer to whom Government Secretariat Circular No. 53 of 1948, of the 21st
December, 1948, and any amendments and additions to it, applies;
(h) to every officer to whom Government Secretariat Circular Standing Instruction No. 83 of the
25th October, 1954, and any amendments and additions to it, [Link] should be noted that a
number of officers otherwise in the public service are excluded or not
included in the application of the Act. These include Army, police and Prisons. For instance
armed forces pension Act Cap 295 and SI 298-3 applied to army officers who would be granted
pension only due to sickness, disability and death on approval by the Pension’s service board.
Equally organizations such as ISO and ESO are excluded.
On the other hand the Police Act Cap 303 Section 62 makes provisions for police authority to
establish schemes for the grant of pension, gratuities and other pensions in respect of officers
appointed under the Act.
However under the government standing orders chapter 1 L-A police and prison officers below
the rank of assistant inspector or principal inspector Grade II become eligible for pension after
completing 12yrs of service but after 45 yrs of age or more but they must transfer to a
pensionable establishment otherwise they remain on gratuity terms. Services with scheduled
government in the 1st schedule to the pension regulations, EADB, URC and UPTC were
recognized as services as pensionable. They were also other public services. Others included
MUK, statutory corporations, district and urban authorities, the UN or its agencies, W.B, and
A.D.B whose service is approved by the pension authority.
Under Section 9, every officer employed in the public service who has qualified for a pension is
entitled to it, i.e., it is a right. However subsection 2, no proceedings can be brought in any
court on the ground that the provision of the Act have not been complied with.
Article 254 of the Constitution provides that a public officer shall on retirement receive such
pension as is consummate with his or her rank, salary and length of service.
In the case of Henry Munyangaizi vs. A.G, the H.C declined to enforce provision of section 9(2)
prohibiting court proceedings. Otherwise Section 22 provides for an appeal board to deal with
denial of pension, gratuity or other allowance under the Act or withholding, reduction or
suspension of pension, gratuity or other allowances under the Act. The appeals board is adhoc
and has 3 members appointed by the minister. The appeal board advises the pensions authority
and when the decision of the pension authority is being appeal the board confirms, reverses or
modifies the decision and the pensions authority must act in accordance with the decision of the
board. As a result of changes in local government administration, Section 61 of the Local
Government Act Cap 243 empowers local government to establish terms and conditions of
service for local government staff including urban [Link] is the Source of Pension?
Section 7 provides that all pension gratuities and allowances under the Act are payable from
the consolidated fund Pension, gratuities and allowances of district and urban authority
employees are to be charged on and payable under the funds of the district and urban authority
from their sources.
Section 8 provides that no income tax is chargeable on any pension, gratuity or allowances
under the Act.
Who is pensionable or how do you qualify for pension
Section 10 the following are the qualifications;
a) 45 yrs of age and having worked for 10yrs and above
b) On abolition of the employee’s office or
c) On Compulsory retirement for the purpose of facilitating improvement in the organization of
the department to which the officer belongs by which greater efficacy of the economy may be
effected
d) On medical evidence that the officer cannot work satisfactorily due to any infirmity of mind
or body i.e, cant work for medical reasons, or
e) Retirement with the consent of the president acting on the advise of the public, judicial or
education service commission
f) Gratuity to a female officer ‘who resigns on or with a view to marriage or is required to retire
on account of her marriage’’
g) On voluntary retirement but on the attainment of the age of 45yrs and having served for a
continuous period of 10 yrs or moreh) Retirement in public interest under s.11
i) Compulsory retirement at the age of 60 yrs under sec. 12
Note, one can get pension before 45yrs under reorganization and improvement of organization,
death, marriage for female officers, on medical evidence, on abolition of office. If you retire
before 45yrs you do not get pension but gratuity.
Section 15 Where an officer is dismissed from the public service, the pensions authority
may, if he or she thinks fit, grant such pension, gratuity or other allowance as he or she
thinks just and proper, not exceeding in amount that for which the officer would be eligible if
he or she retired from the public service in the circumstances described in section 10(1)(e).
Section 17 pension and gratuity are not attachable. Where any person to whom a pension or
other allowance has been granted under this Act is adjudicated bankrupt or is declared
insolvent by judgment of any competent court, the officer shall continue to receive the
pension, allowance or gratuity, but the pension, allowance or gratuity shall not be subject to
attachment under the Bankruptcy Act.
S.18 pension and allowances cease on death but where a pensioner dies, before expiry of
15yrs after his retirement, the pension authority may continue paying his pension or allowances
for unexpired period. Usually they pay to children or spouse. There are three scenarios
i) to the spouse if survived for the unexpired period
ii). If not survived by spouse to children under 18yrs
iii) if spouse dies then children for under 18 yrs for unexpired period.
In addition to the Public Service Pension Scheme (PSPS), members and staff of parliament are
now provided with pension and gratuity under the Parliamentary Pensions Act 2007
(No.6/2007). The scheme covers all members of parliament of parliament whether elected or
ex-officio except the Prime minister and Vice president. Contributions by members of parliament
is 15% of their Pensionable emoluments while the government contributes 30% monthly.
Apart from the above elements of the PSPS there are a number of other laws covering other
public servants namely; local government staff, police and prison officers, judges, magistrates,
intelligence officers and some public bodies, authorities and enterprises. Their social security
arrangements vary and are subject to decisions of boards of public bodies.
For the judges of the High Court, Justices of the Court of Appeal and Supreme Court provision
was made in 1996 under the Judicature Act (s. 46(3) Cap. 13) to the effect that once they are
appointed on pensionable terms they are eligible ‘for pension on completion of one year of
service or in accordance with the Pension Act, whichever is sooner’
For the Local Government, Local Government Act provides that the terms and conditions of
service of the local government staff shall conform with those prescribed by the Public service
Commission for the Public service generally. For the UPDF, the UPDF Act makes provision for
pensions and gratuities for both officers and militants (non officers).For the Police officers, the
Police Act establishes a police authority which is empowered to make provisions for the
establishment of schemes for the grant of pensions, gratuities and other benefits in respect of
officers appointed on permanent or temporary terms.
The Security Organizations (Terms and Conditions of Service) Regulations made under the
Security Organizations Act (Cap 305) provides for compensation for employees of intelligence
organizations for injury during the normal course of duties. On retirement however there is no
pension but ex gratia payment.
Every Commission, Authority or Public enterprise (the few that were not privatized or that were
created in the last two decades) such as the Electoral Commission, Uganda Human Rights
Commission, Public Service Commission, Electricity Regulatory Authority, Uganda Revenue
Authority, Bank of Uganda or Uganda Investments Authority there are regulations and terms
and conditions specific to that Authority, Commission or Public [Link] instance the Bank
of Uganda Act (Cap 51) provides that Board members not being employees of the Bank may be
paid remuneration or allowances as the Board may in consultation with the minister determine
and the Board itself is empowered to make byelaws to regulate conditions of service of Board
members while for the staff they are engaged ‘on terms and conditions that shall be laid down
by the Board’.
Private Social Protection Schemes
There are a number of Private non statutory social protection schemes managed by insurers
and some large companies. These include private pension schemes, health insurance, and
education insurance. Among the existing schemes are those at Makerere University-Makerere
University Staff Retirement Benefits Schemes, British American Tobacco Staff Pension
Scheme, Stanbic Bank Staff Pension Fund and Bank of Uganda Staff Pension Scheme. These
schemes are unregulated. More interestingly the schemes usually operate side by side with the
statutory NSSF arrangements.
Reforms to the Social security and Pension Sector in Uganda.
The reform of the retirement benefits sector (pension sector) started in 2002. In 2003,
stakeholders were consulted on the reforms of social protection including the pension sector,
and an STG Report was prepared. The report recommended the establishment of a regulatory
framework for the pension sector and liberalization, among others. Whereas attempts have
been made to reform the sector since 2002, the process has not been successful due to stop-go
approach to reform and other political economy issues. However since 2008 to date, some
important milestones have been achieved. These include, a clear decision by the
cabinet to advance the reform as a 2 step process, first putting in place an effective regulatory
framework, and secondly liberalizing the sector to create competitive pressure in order to
improve governance of pension funds.
i) The Uganda Retirement Benefits Authority Act 2011
The 8th Parliament in May 2011 enacted the legislation, the Uganda Retirements Benefits
Regulatory Authority (URBRA) Act 2011. This legislation was assented to by the President in
June 2011 and became effective on the 26th September 2011, the date the Act was
[Link] Act establishes an independent regulatory authority, the Uganda Retirement
Regulatory Authority, which is responsible for regulating the establishment and operation of the
retirement benefit scheme in Uganda in both the private and Public sector, protection of funds of
retirement benefits schemes, supervising institutions that provide retirement benefit products
and services and ensuring the stability of the financial sector through promoting the stability of
the retirement benefits sector as a whole with a view of promoting long term capital
development. It is hoped that the authority will help promote transparency, accountability and
ensure the integrity of retirement benefits schemes and the retirement benefits sector as a
whole and also protect the interests of members and beneficiaries of these schemes while
preventing contingent fiscal liabilities incurred by the government. The Act also provides for
licensing of custodians, trustees, administrators and fund managers.
ii) The Retirement Benefits Sector liberalization Bill, 2011
About March 2011, the Ministry of Finance, Planning and Economic Development (MOFPED)
drafted a bill which is currently under discussion entitled the Liberalization of the Retirement
Sector Bill 2011. The draft Bill aims at liberalizing ‘the retirement benefit sector’, to remove
monopoly over mandatory contributions, to provide for fair competition among licensed
retirement benefits schemes, to provide for mandatory contribution and benefits, to provide for
voluntary contributions and voluntary schemes, to regulate occupational retirement schemes, to
provide for licensing of umbrella retirement benefits schemes, to provide for the portability and
transfer of accrued benefits, to provide for innovation of new retirement products and services,
to consolidate and reform the law relating to retirement benefits, to convert the public
servicepension scheme into a contributory scheme, to repeal the National Social Security Fund
Act Cap 222 and for related matters.
iii) The (Draft) National Health Insurance Bill, 2010
The Ministry of Health in Uganda Drafted the Bill intended to cover about 2 million
Ugandans in the formal sector expected to be funded by 4% employer’s contribution and 4%
of each employee’s gross monthly salary. The rest of Ugandans are also supposed to be
covered either under community insurance schemes (mainly for rural areas and informal)
sector or private commercial health insurance schemes. The Draft Bill proposes to establish
the National Health insurance system with three schemes. a) The social health insurance
scheme, b) Community health insurance scheme c) Private Commercial Health insurance
Scheme. It is proposed that every resident in Uganda shall compulsorily be registered with one
of the above schemes. It is further proposed that a board of directors be established to
administer the schemes. The Bill also proposes the kinds of benefits that members should
enjoy.
