The Committee on Public Service and Local Government has questioned government’s readiness to run the proposed Public Service Pension Fund.
The committee is currently processing the Public Service Pension Fund Bill, 2023 which seeks to establish a fund to collect contributions from public servants and pay retirement benefits to the beneficiaries akin to the National Social Security Fund (NSSF) that manages contributions from the private sector.
The bill was tabled for first reading on 14 March 2023 by the Minister of State for Public Service, Hon. Grace Mary Mugasa.
While meeting the Minister of State for Finance (General Duties), Hon. Henry Musasizi on Wednesday, 12 April 2023, the legislators sought government’s commitment to have the bill processed and later on implemented.
“How ready is government to see that this bill is fully processed because it seems there is a non-committal on their side and they cannot guarantee the availability of funds for this scheme to take off,” Hon. Betty Naluyima (NUP, Wakiso District) said.
The Deputy Chairperson of the Committee, Hon. Christine Apolot said a lot of information about the bill is desired from both the Ministers of Finance and Public Service.
“Since this is a government bill, the process should look smoother but this bill doesn’t even have a take-off period. We expect a situation where the commencement date of the bill is clearly specified other than having a bill in the stores and there is nothing going to happen,” Apolot said.
Just like the NSSF, the Public Service Pension Fund will be funded by a 15 per cent contribution with the employer (government) contributing 10 per cent and the employee (public servants) contributing five per cent which will be in form of a monthly deduction from the employee’s salary.
However, in the first year of implementation, government will fund the whole 15 per cent.
Clause 32 of the Bill states that, ‘that deductions to the fund will be the responsibility of the accounting officers who will be personally responsible for any delays’.
MPs proposed that the 10 per cent contribution from government should be deducted at source to avoid the current cases of non-remittances at NSSF.
“Since it’s coming from the Consolidated Fund, let government hold the 10 per cent other than sending it to accounting officers in the ministries and local governments,” Hon. Sowedi Kitanywa (NRM, Busongora County North) said.
Minister Musasizi said the Public Service Pension Fund will be run the same way NSSF operates and that its functionality will bring more money into the economy.
However, he was tightlipped on the actual period of implementation once the bill is passed.
“This is a big reform which cannot occur in a few months; I know Ministry of Public Service has arranged some money to begin preparatory arrangements. This will take like three years and within that time, we would have become ready,” Musasizi said.
He added that the scheme cannot be implemented immediately until statistical research has been done to establish the current number of public servants.
“This bill was discussed by the previous Cabinet. So it means even the figures available, I cannot confidently rely on them since we are apparently auditing the payroll because we have noted a number of inaccuracies,” he said.
According to information obtained from the Ministry of Public Service, there are about 350,000 public servants on active payroll at local governments, ministries, departments and agencies.
The scheme will include all civil servants, with the exception of UPDF officers, as well as lecturers of public universities, who have their own schemes.
Distributed by APO Group on behalf of Parliament of the Republic of Uganda.