Rwanda Doubles Pension Contributions Rate To 12%
Thursday, February 6 2025 3:07 pm
By Adapted from www.rssb.rw Follow on LinkedIn
Savers with Rwanda’s social security provider, the Rwanda Social Security Board (RSSB), will contribute 12%, an increase from the current 6% of their monthly salary, according to RSSB CEO Regis Rugemanshuro, starting this year (January 2025).
The increase is part of the ongoing reforms aimed at ensuring a sustainable pension system. RSSB also stated that the pension will gradually increase to 20% by 2030. To facilitate a smooth transition, the increase from 12% to 20% will be implemented in 4 years with a 2% annual increase from 2027 to reach 20% in 2030. The mandatory pension scheme requires both employers and employees to contribute equally to the employee’s pension.
Currently, the total contribution rate is set at 6% of the employee’s basic salary, with the employer contributing 3% and the employee contributing 3%. This 6% contribution rate was established in 1962 when life expectancy was 47 years. According to the most recent census of 2022, the life expectancy in Rwanda has increased to 69 years but the rate had not been updated since then. The changes were announced in the wake of the adoption of a Presidential Order fixing the rate of contributions for the mandatory pension scheme approved by the Rwanda Cabinet on November 9, and published in the Rwanda Official Gazette on December 13, 2024.
For the Presidential Order fixing the rate of contributions for the mandatory pension scheme, click here.
