The Government has stepped up sensitisation of local government leaders and technical officers on the transition to Uganda’s new Public Service Pension Scheme ahead of its implementation in the 2027/28 financial year.

The Ministry of Public Service is engaging local governments to prepare for the contributory pension arrangement, which will require eligible public servants to contribute 5 percent of their basic salary, while Government will make a 10 percent employer contribution to the Public Service Pension Fund.

The new arrangement is expected to take effect on 1 July 2027.

Officials from the Ministry of Public Service highlighted the transition during the ongoing FY2027/28 Local Government Budget Consultations at Riders Hotel in Seeta, where local government leaders and technical officers were urged to begin preparing for the changes.

Under the new Public Service Pension Fund framework, contributions from employees and Government will be accumulated and invested to support members’ retirement benefits. The reform changes the financing structure of public service pensions while retaining defined-benefit features in the determination of retirement benefits.

The scheme covers eligible public servants in traditional Government service, local governments, the teaching service, Uganda Prisons and Government agencies that are not already covered by another pension scheme.

The transition to the new pension arrangement will not cancel pension rights already earned by serving public officers.

Government will continue to account for obligations arising from service rendered before the new scheme takes effect, allowing the transition to the contributory system to take place in a structured manner.

The retirement age of 60 years will remain unchanged, while the existing pension formula and modes of retirement will also remain in place, according to the Ministry's sensitisation message.

Local governments have been advised to use the transition period to put their administrative and financial systems in order before the new scheme becomes operational.

Key preparations include cleaning and updating employee records, ensuring accurate personnel information is transferred and making the necessary budget provisions for the employee and employer contributions.

For the FY2027/28 financial year, local governments will therefore need to account for the 5 percent employee contribution and 10 percent Government employer contribution under the new arrangement.

The Ministry has also encouraged local government leaders and responsible officers to continue sensitising public servants so that employees understand how the new pension system will affect their retirement benefits.

The reform is intended to move Uganda’s public service pension system towards a funded and more sustainable financing model.

Under the new system, regular contributions will be collected and invested over time to support the payment of retirement benefits when members become eligible.

The Public Service Pension Fund Act, 2025 provides the legal framework for the funded, contributory public service pension system. Government has described the reform as a shift from the previous non-contributory arrangement to a funded model.

The Ministry of Public Service has urged local governments to use the period before July 2027 to complete the necessary administrative preparations and ensure that public servants are adequately informed about the new pension arrangements.