Government operationalized the Public Service Pension Fund (PSPF) Act, 2025, establishing the legal and institutional architecture for a funded, co-contributory public service pension scheme. This marks a landmark transformation in Uganda’s public sector human resource and fiscal management architecture. For nearly eight decades, public service retirement benefits were administered under the colonial-era Pensions Act (originally enacted in 1946), operating as an unfunded, non-contributory Defined-Benefit (DB) scheme financed entirely from the Consolidated Fund.

The 2025 Act transitions Uganda’s civil service to a modern, funded, contributory retirement scheme, establishing a mandatory 5% employee salary deduction supplemented by a 10% Government employer contribution. Beyond budget stabilization, the reform serves as a powerful catalyst for domestic capital formation and institutional governance. Placing the newly autonomous fund under a representative Board of Trustees regulated by the Uganda Retirement Benefits Regulatory Authority (URBRA) unlocks a steady pool of long-term contractual savings, deepening domestic capital markets, lengthening sovereign debt maturities, and mobilizing non-inflationary financing for national development priorities.

Crucially, the Act ensures labor force stability and legal certainty by ring-fencing accrued rights from the previous pay-as-you-go system, preserving all past service entitlements during the transition. By automating contribution workflows and segregating pension assets, the framework permanently arrests the accumulation of legacy arrears, guarantees timely post-retirement payouts, and aligns Uganda’s public sector human resource strategy with modern, actuarially sound compensation practices.

For more insights, please visit: 

https://www.publicservice.go.ug/download/the-public-service-pension-fund-act-2025/