DUBAI –The United Arab Emirates has announced new end-of-service scheme plans for employees and the Savings Scheme will continue alongside the normal gratuity system.
The new program was launched to facilitate employees of the private sector and free zones, and in the initial phase, it will be optional for employees to join.
Under the new system, workers will pay a financial payment on a monthly basis; the contributions will be invested in three options including Risk Free Capital Guarantee, investment where you choose the risk, and a Sharia compliant investment.
As per the latest details, employees can choose from either receiving financial benefits after the termination of the employment contract or continuing investing in the end-of-service scheme.
The end-of-service scheme is now in operation in the Kingdom and registrations are open from the Ministry of Human Resources and Emiratisation (Mohre) or the Securities and Commodities Authority (SCA).
If companies aim to register for the scheme, they can pick staff members. UAE residents can also invest in the scheme.
Mohre and SCA will receive requests through its service channels, and employers need to pick approved investment funds, and pay the subscription fees for the workers they wish to register.
Authorities will then grant licences to investment service providers for conducting activities of the new scheme.
Different subscription of end-of-service scheme
First is the basic subscription which is for non-skilled employees. Through this option, contributions strictly go to the low-risk investment funds.
In second case, skilled workers will pay for funds to high- to medium-risk investments.
Payment deduction from salaries
For people having less than 5 years in company. 5.83% of basic salaries will be taken
For workers with over 5 years of experience, 8.33% of the basic salary will be deducted
Employees can boost their investment returns by increasing their contributions to around one fourth of their total annual salary.
