Pension Scheme Designs: Can It Influence Timing of Retirement? The Case of the Public Service Pension Scheme in Uganda

Abstract

Ambiguity in literature about how pensions influence retirement decision can be a challenge to policy formulation unless further inquiry is done. This ambiguity could be attributed to a number of factors including the study scope, different pension designs and differing study methodologies. Using Uganda’s public service pension scheme, this study delves into exploring whether the scheme’s design influences timing of retirement. Using a probit model, analysis of the effect of pension o timing of retirement is done using pensioners’ data set from the pension department, ministry of public service. Results from the experiment show that the scheme significantly influences timing of retirement. Key implication from this is that the investigated pension scheme variables (age, experience and pension benefits) can be used as fiscal tools for attaining socioeconomic targets.