A Description of the Pension System in Uganda: Need for Reform

Abstract

The current pension system in Uganda is similar to those in most Anglo-speaking countries in Sub-Saharan Africa. The system is fragmented lacking a policy framework for its efficient operation. Consequently, coverage is low, the public service schemes are unfunded and expensive and the governance of the mandatory pension scheme is unsatisfactory. Private pension schemes operate voluntarily without a law save for the common law principles of trusts and are not supervised. The system is ripe for fundamental reforms which should include the introduction of a supervisory framework, parametric reforms in the public service schemes in order to manage the ever rising implicit pension debt, introduction of best practice governance principles in both the National Social Security Fund and private occupational pension schemes. While pension reform is a major policy which the government should carefully consider, yet it is possible for the same to be developed in phases.