Planning for Old Age/Retirement
- What is retirement?
Retirement is the stage where a person stops working completely. In Uganda, many people do not stop work completely because they do not plan early enough for their retirement. This forces them to continue working even after the normal retirement age. For formal employment, the minimum age of retirement in Uganda is 55 years. People retire either voluntarily (resign or retire before the minimum retirement age) or involuntarily (forced to retire because of age, fired from work, or forced to stop working due to sickness or disability).Many people plan to retire at the age when they are eligible for private or public pension benefits. A pension is a regular payment made during a person’s retirement from an investment fund to which that person or their employer has contributed.
- Plan for your retirement early
Everyone needs to plan for their retirement early. It’s important to ask yourself how much income you will require when you retire to be able to maintain yourself and any dependants you may have during retirement. Planning early, by saving and investing wisely, will help you meet your needs during retirement. - If you work for the Government, you are entitled to a public pension
If you are an employee of the Government (e.g. ministries, government hospitals, schools, security forces), you don’t contribute to your pension scheme yourself. The Government will automatically pay you a certain amount of money every month for 15 years after you have retired. Make sure you fill in the pension form during employment and have the documents (such as your appointment letter) you need to get your pension processed. Your family can get your pension if you die – by presenting the letter of administration and appointment letter to the pension desk at the Ministry of Public Service.
- If you work in the private sector, your contributions to NSSF will be given to you upon retirement
If you are employed by a private company or a Non-Governmental Organisation (NGO), you will have a 5% deduction from your salary sent to the National Social Security Fund (NSSF). Your employer must also make a 10% contribution to the NSSF every month. It is always important to get your statement from NSSF to ensure that your money is being saved every month. You will have your savings paid to you when you:- Retire at the age of 55, or
- Have an accident that causes you to stop working, or
- Have a terminal illness such as acute AIDS or terminal cancer.
- Ask your employer if s/he has signed up for a voluntary private pension plan
Voluntary private pension schemes (plans) are retirement benefits plans which are set up by employers in addition to the mandatory NSSF. In voluntary schemes, either only the employer or both the employer and employees make contributions to the scheme. These pension schemes are licensed by the Uganda Retirement Benefits Authority. - Your family can benefit from your pension – if you provide the right information
If you are on a pension plan, you are sure of a regular income to take care of you in your old age or disability. Your family will also benefit in case of your death. You should ensure that you provide information about your next of kin on your pension form so that your pension is given to the right person. Also make sure your spouse or family members are informed about your expected benefits and the procedures to access them should you die. - Use your benefits wisely
Even if you are on a pension plan, you still need to make a plan for your retirement, which should include plans for an investment which gives you an income after the pension benefits have been used up. The pension benefits could, for example, be used to buy more animals for your farm or to expand your business that you had started while in employment. - Start planning for your retirement now
Start saving and investing some of your income as early as possible. If you are in a pension plan, this will be a useful addition to your retirement or pension income. If you are not, these savings and investments will be your security for old age. Please note: The retirement package you receive from the Government (if you are a civil servant) or NSSF (if you are a private sector employee) may not be enough to enable you meet all your needs during retirement. Therefore plan early, save and invest to be able to supplement your retirement or pension income.
