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17 January 2025 Rwanda gazettes Presidential Order revising contributions to compulsory pension scheme
Rwanda gazetted Presidential Order No 086/01 (the Order) on 13 December 2024, setting out the contribution rate to a compulsory pension scheme. The primary objective of the Order is to increase pension contribution from 6% to 12% split between the employer and employee. This Order is part of Government reforms that aim to, among other things, strengthen social security for retirees, promote economic growth and address the rising cost of living for pensioners. The base for determining the pension contributions will also expand to include transport allowances, which was not the case in prior periods. From January 2025, compulsory pension contribution rate will increase from the current 6% (split equally between employer and employee) to 12%, with a target of 20% by 2030.
The Order stipulates that the proposed rates are subject to review based on recommendations derived from an actuarial study of the compulsory pension scheme. Consequently, the rates may be adjusted during the set implementation period. The reforms are meant to align with Rwanda's increased life expectancy, which increased from 47 years in 1962 to 69 years in 2022. Employers and employees should consider the phased increase in pension contributions that took effect on 1 January 2025.
Document ID: 2025-0277 | ||||||