Government has to urgently fix the pension mess in the Ministry of Public Service

Published 2 years ago -

As a country, we have failed the hard working men and women who gave their all in service of this country. We have failed them because some retire to nothing, simply because government and the ministry of public service has messed up their pension.

The Public Service pension scheme is one of the main retirement benefits schemes in Uganda set up to benefit employees in public service such as nurses, teachers, prison officers and police officers among others, who upon retirement receive gratuity and life pension.

However, it hasn’t always been rosy as cases of delayed pension or no pension, embezzlement of pension funds have become a common song, rendering many old retirees desperate and vulnerable to the unforgiving economic turmoil.

Currently, according the Auditor General’s report for FY 2014/15, The Ministry of Public Service has an outstanding pension and gratuity liability of Ugx 199 Bn, as at 30/6/2015 (up from Ugx 108 Bn as at 30/6/2014). The rate at which gratuity and pension arrears continue to accumulate uncontrollably, it will soon be unsustainable.

While the Ministry has often blamed this on budget shortfalls, the problem is bigger and deeper than that.

So where is the problem?

The public service pension system is bedevilled by two main ills; corruption and embezzlement on one hand and institutional and management deficits on the other.

The last five Auditor General’s reports have been awash with mind blowing corruption cases in the Ministry Of Public Service (MoPS) the most recent being the financial impropriety of the pension fund in the ministry of that resulted in the misappropriation of over 165 billion shillings and other anomalies, reported in the FY 2012/12. In his report for FY 2014/15 the Auditor General reported that Ugx 11bn was paid to pensioners who had exceeded their pensionable period of 15 years, yet no life certificates were availed as proof of their continued existence.

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The Auditor General’s report for the FY 2014/15 reported that the pension service in MoPS is equally poorly managed, Ministry of Public Service does not have a comprehensive stock of past employees as well as a forecast of how the current Government employees will retire and therefore plan for their terminal benefits accordingly. It only relies on claims submitted by the retired staff or by their benefactors, in case of death of the retired employees. Former employees in the Ministry such as the indicted former Permanent secretary and Principal Accountant Lwamafa Jimmy and Christopher Obey capitalised on these loopholes to embezzle billions of shillings with remarkable ease.

The money that has been embezzled in the last five years (Ugx 176 Bn), could have offset 87% of the outstanding pension and gratuity liability of Ugx 199 Bn in the Ministry.

What needs to be done?

In recent Ministerial policy statements to Parliament, the Ministry of Public Service said that efforts were underway to reform the pension service among which were, prioritizing payment of Pension and Simplify Pension management systems, submitting a Cabinet Memo to the Cabinet among other things proposes a repeal of the Pension’s Act, establishment of a Contributory Scheme, preservation of accrued pension rights and in establishment of a Public Fund called the Public Service Pension Fund. The pension payment was also decentralised, which is a step in the direction. However, there is concern that many local governments don’t have both the technical and human capacity to manage it. Nonetheless the pensions system as a whole needs to be streamlined, right from forecasting, budgeting, tracking retirees, computation, payment and pensions information management. As it is now, it’s just a stinking mess.

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On its part, Parliament needs to urgently pass the Retirement Benefits Sector Liberalisation Bill, which will put in place the legal infrastructure necessary for operation of private retirement benefit schemes outside the traditional public service pension scheme and National Social Security Fund.

Parliament needs to follow up on the Auditor Generals reports on the embezzlement and mismanagement of pension funds in MoPS and compel government to recover and punish those involved.

Government has to show stronger commitment in prosecuting those involved in robbing people of their life savings. Pension as a social security measure is a right government is obliged to provide to its people, failing in that regard is both embarrassing and unforgivable.



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