Expatriates working in the UAE and not yet saving for retirement may now be able to obtain a golden pension upon the termination of their employment. As a Shari’a-compliant investment and savings firm controlled by the Investment Corporation of Dubai, National Bonds introduced the Golden Pension Scheme on October 11. The new Emirates-based program will allow companies to offer pension plans to UAE ex-pat workers and help them save for retirement. Here is all you need to know about UAE Golden Pension Scheme for ex-pats.
What Is A Golden Pension Scheme?
The National Bonds’ Golden Pension scheme is open to all UAE governmental and private establishments. Foreign employees in the UAE seeking financial security after retirement may be interested in National Bonds. Employers can enroll in the pension plan if their employer registers with National Bonds and enrolls in the Golden Pension Scheme. A company is responsible for deciding how many of its employees will be covered by the plan as well as how much money will be allocated to them. Under employee National Bonds accounts, Sukuk would be issued, which are sharia-compliant saving bonds.
How Does Golden Pension Scheme Work?
By registering for the National Bonds’ Golden Pension scheme, companies can either invest a lump sum or invest a portion of their employees’ accumulated end-of-service benefits. The plan allows you to make additional contributions of as little as Dh100 per month if your employer signs you up. The pension scheme also involves employers opening individual accounts and distributing the funds proportionally to employees.
Is It Possible For Me To Redeem Portions Of My Pension As Needed?
Sukuk issued by National Bonds are locked for redemption. They can only be redeemed upon request of the company. The pension savings cannot be accessed unless your employer requests it. You can, however, access your additional savings if you have contributed to them from your end of the scheme.
What Are Gratuities?
UAE ex-pat workers or employees who have completed at least one year of service are entitled to defined, end-of-service benefits. According to UAE labor law, gratuities are calculated based on the employee’s base salary and length of service.
What Is Pension Plan?
Managing retirement funds is a benefit that employers provide to employees as a percentage of their salary is contributed to the fund on behalf of the employee. This amount is determined by the percentage of a worker’s salary. After retirement employees can choose to contribute to the fund and draw a pension.
Does UAE Have Pension System?
After retiring at 49 or working for a minimum of 20 years, UAE nationals working in government or the private sector are eligible for pensions and other retirement benefits. The agencies that administer UAE pensions Emiratis are Abu Dhabi Pension Fund, Social Security Authority, Sharjah Social Security Fund, and General Pensions.
In What Ways Are Pensions Different From Gratuities?
According to UAE Labor Law, Federal Decree-Law No. 33 of 2021, private sector employees are entitled to gratuities at the end of their employment term. Golden Pension Schemes are available to employers in the UAE. Gratuity is not replaced by Golden Pension Scheme. Companies may well consider this scheme to be an enhancement to their gratuities.