The UAE launches a new savings system for employee benefits, replacing the traditional end-of-service gratuity. This initiative by the Ministry of Human Resources and Emiratisation (MOHRE) aims to enhance financial security and investment opportunities for employees.
The UAE launches a new savings system for employee benefits, providing workers with flexible investment options. The system allows employees to grow their savings through top-tier investment funds. It also strengthens the UAE’s appeal as a leading destination for global talent.
The initiative includes four approved investment funds, offering secure and profitable opportunities. The system operates on a defined contribution basis, with employers making regular monthly contributions. Employees can also choose to add voluntary contributions, further boosting their savings.
Registration Process
The registration process includes four key steps:
- Choosing an investment fund: Employers select an approved fund and sign a subscription agreement.
- Appointing an intermediary: Employers designate an intermediary to manage administrative tasks.
- Employee enrollment: The intermediary registers employees and opens savings accounts.
- Monthly contributions: Employers make mandatory contributions, while employees can add voluntary savings.
Two Disbursement Pathways
The UAE launches a new savings system for employee benefits, ensuring flexible disbursement options. Upon leaving a job, employees can withdraw their savings or keep investing.
For voluntary contributions, employees can withdraw funds fully or partially through the system’s designated intermediary. Employers must inform MOHRE of employment terminations to initiate payouts.
Investment Options and Benefits
MOHRE has approved four investment funds: Lunit, First Abu Dhabi Bank, Dubai Investments, and National Bonds. Employees can choose the fund that best fits their financial goals.
The system offers multiple benefits:
- Alternative to gratuity: Employees receive accumulated savings instead of a lump-sum gratuity.
- Voluntary savings: Workers can contribute additional funds for greater financial security.
- Flexible investment choices: Employees select from four approved funds to maximize returns.
Who Can Enroll?
The system is available to private sector employers, free zone entities, and non-citizen government employees. Freelancers, self-employed individuals, and UAE nationals in the public or private sector can also participate.
Employers must calculate contributions based on an employee’s continuous service period. Voluntary contributions cannot exceed 25% of the total salary.
This savings system boosts the local economy, protects the workforce, and secures employees’ financial futures. By offering long-term investment options, it ensures stability and growth in the UAE’s labor market.
