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

By: REA­GAN WA­MA­JJI

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.

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.

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.