Uganda’s retirement benefits sector continued to record strong growth in the 2024/25 financial year, with total assets under management rising to Shs30.68 trillion from Shs25 trillion in the previous year.
According to the 12th Annual Retirement Benefits Sector Performance Report, pension assets increased by Shs5.3 trillion during the period, representing a 21% growth compared to 2023/24. The sector also delivered an average return on investment of 14.6%, reflecting improved performance of pension fund investments.
As a result of this growth, the ratio of retirement savings to Gross Domestic Product (GDP) increased from 12.2% to 13.6%, highlighting the expanding role of pension funds in Uganda’s financial system and broader economy.
However, despite the strong growth in assets, pension coverage remains relatively low. The report shows that only 16.1% of Uganda’s working population is currently enrolled in formal retirement savings schemes.
This indicates that while the pension industry is becoming a significant source of long-term capital for the economy, the majority of Ugandan workers remain outside formal retirement benefits systems.
Speaking during the launch of the report at Fairway Hotel in Kampala, the Minister of State for Planning, Amos Lugoloobi, said the growth of the retirement benefits sector is critical to Uganda’s long-term economic transformation.
Amos Lugoobi Minister of State for Planning delivering his keynote speech
Lugoloobi noted that government has embarked on an ambitious strategy to grow the country’s economy from $50 billion to $500 billion by 2040 under the Ten-fold Growth Strategy.
“The Government of Uganda embarked on an ambitious agenda to expand Uganda’s economy from $50b to $500b by 2040 under the Ten-fold Growth Strategy,” Lugoloobi said.
He explained that the strategy is anchored on key sectors such as agro-industrialisation, tourism development, mineral development, and science, technology and innovation, which are expected to drive Uganda’s economic transformation.
According to the minister, the retirement benefits sector will play a vital role in achieving this target because of its contribution to domestic savings.
“Retirement schemes account for about 67% of gross domestic savings. In line with the Ten-fold Growth Strategy, we must support the retirement benefits sector to raise domestic savings from 21% to 40% of GDP by 2040,” he said.
Lugoloobi commended the Uganda Retirement Benefits Regulatory Authority (URBRA) for strengthening regulatory oversight within the sector, which he said has enhanced stability and confidence among pension scheme members and industry players.
He noted that sustaining the sector’s growth will require improved governance, operational efficiency, and deeper capital markets to absorb and productively invest pension savings.
The minister also highlighted ongoing reforms in the country’s public service pension system, including the recently enacted Public Service Pension Fund Act, 2025.
“The Act establishes a pre-funded scheme with joint contributions from government and members to ensure timely, predictable and sustainable pension benefits,” Lugoloobi said.
Despite the progress made, analysts say the sector still faces structural challenges, including low savings rates, limited participation by informal sector workers, and heavy reliance on the National Social Security Fund (NSSF).
Growing Assets Signal Sector Maturity
The report indicates that Uganda’s pension industry is steadily accumulating capital as contributions grow and investment portfolios expand.
Most pension assets are invested within the East African region, with Uganda accounting for the largest share of the investment portfolio at 68.5%, equivalent to about Shs21.3 trillion. Kenya accounts for 23.4% of investments, while Tanzania represents 7.9%.
These investments play a significant role in financing government securities, infrastructure projects and corporate investments within the region.
Benjamin K. Mukiibi, Chief Manager Research and Strategy at URBRA, said the total number of pension accounts increased to 4.06 million in 2025, up from 3.82 million the previous year.
The majority of these accounts are held under the National Social Security Fund (NSSF), which accounts for more than 3.6 million savers.
Other schemes include the Public Service Pension Scheme with about 365,000 members, voluntary occupational schemes with 82,941 members, the Makerere University Retirement Benefits Scheme with 8,515 members, and the Parliamentary Pension Scheme with 1,499 members.
“As a country, we need to talk about domestic saving. Investment saving is very important and fund managers have a big role to play,” Mukiibi said.
He added that strong liquidity in the sector is largely driven by employer contributions.
Informal Sector Limits Coverage
One of the biggest challenges facing Uganda’s pension sector is the dominance of informal employment in the labour market.
The report indicates that Uganda’s employment-to-population ratio stands at 37.5%, while the labour force participation rate is estimated at 42.9%.
These figures suggest that a large proportion of Ugandans operate within the informal economy where structured retirement savings schemes are rare.
As a result, millions of workers have little or no retirement savings, raising concerns about potential old-age poverty in the future.
The report also shows that retirement savings per capita remain relatively modest.
Average annual savings per member account stand at about Shs646,411, which is roughly equivalent to $339 per person. Analysts say this reflects relatively low incomes and irregular contribution patterns among many savers.
Experts believe improving retirement savings will require stronger financial literacy campaigns, incentives for voluntary pension contributions, and the development of pension products tailored to informal sector workers and small business owners.
Sector Supported by Expanding Financial Ecosystem
Uganda’s pension industry is supported by a growing network of financial service providers responsible for managing and safeguarding retirement funds.
The sector currently includes 224 individual trustees, four corporate trustees, 14 external auditors, eight administrators, seven fund managers, and seven custodians.
This institutional framework is gradually strengthening governance, transparency and accountability within retirement schemes.
However, operational costs remain a challenge. Staff expenses account for the largest share of operational expenditure at 51.6%, followed by other administrative expenses at 38%.
Fund management, custodial and administrative services account for 7.1% of the sector’s costs, while actuarial services represent only a small portion.
Pension Funds Key to Development
Beyond providing retirement security, pension funds are increasingly viewed as an important source of long-term capital for national development.
With assets exceeding Shs30 trillion, pension funds have the potential to finance large-scale projects such as infrastructure development, housing and industrialisation.
Economists say harnessing these funds effectively could reduce reliance on external borrowing while strengthening domestic investment.
However, experts emphasise that expanding pension coverage remains critical to ensuring that more Ugandans benefit from retirement savings while deepening the country’s capital markets.
With life expectancy in Uganda estimated at about 68 years and the working-age population accounting for roughly 56.7% of the total population, strengthening retirement savings systems is becoming increasingly important for long-term economic and social security.
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