UAE Urges Private Sector Companies to register for savings scheme
Employers in the United Arab Emirates are advised to register for a new optional "savings scheme," aimed to replace the traditional end-of-service rewards system and offers several benefits for both companies and employees.
Through means of investment returns supported by trustworthy investment funds inside the UAE, this program guarantees workers' financial benefits and encourages them to expand their savings, so providing private sector businesses with a better way of attracting and retaining talent.
Aiming to improve employees' well-being, draw qualified professionals, and strengthen the corporate reputation of participating companies in the increasingly competitive job market of the United Arab Emirates , the UAE Ministry of Human Resources and Emiratization (MoHRE) is actively urging private sector companies to adopt this scheme. The MoHRE has joined with the Securities and Commodities Authority (SCA) to pick and approve investment funds that satisfy high requirements for handling and administering savings money, therefore guaranteeing trustworthy and responsible management of workers' financial resources.
Participating in this program will help businesses in various ways. Businesses who register for the savings program can present themselves as those who provide employees first priority long-term financial security and success. Stronger loyalty and involvement coming from this commitment to employee welfare might allow companies to attract and retain talent more easily. Furthermore, employee productivity may increase since the program allows workers to increase their savings via wise investment decisions, thereby enabling them to reach more financial development over time.
Finally, the scheme benefits businesses as well since it reduces the long-term costs related with end-of-service gratuities. Unlike the traditional method whereby the gratuity is calculated depending on an employee's last basic income, the savings plans base contributions on the employee's current basic salary at every payment period. This structure offers a logical and flexible approach of end-of-service rewards and lets companies more routinely manage their financial obligations and maintain long-term financial stability.
Companies wishing to register for the savings program can do so through established routes provided by MoHRE. Applying, businesses select among a selection of approved investment products and pay the necessary subscription fees for employees they wish to hire. Regularly updated information on approved funds and scheme specifics provided on the MoHRE website assists companies to understand and implement the system for their staff.
Before enrollment, employees can save any gratuity they earn; then, they will move to the new plan. Under the savings plans, the current end-of-service gratuity system will be halted; all earned gratuity will be computed up to the date the employee is registered in the new system. Their end-of-service benefits will be calculated under the terms of the savings program going forward; full amounts will be paid upon employment contract termination.
Employees registered in the program can increase their savings by making additional contributions, up to 25% of their full annual salary, if they so want. Moreover, depending on the specific terms and conditions of the program, people could be able to withdraw some or all of their investments returns. While unskilled workers have access to a safe Capital Guarantee Portfolio to protect their money, experienced workers can choose from a variety of investment options fit for their preferences.
Moreover provided to different kinds of employees intending to benefit from it is the savings plan. Voluntary volunteers abound among self-employed individuals, freelancers, non-citizen workers hired by government or affiliated businesses, and Emirati employees working in public and commercial sectors; they also have the option to help to raise savings. Still, companies are in responsibility of helping UAE residents with their national pension and social security systems.
The savings scheme allows employees changing careers freedom. Workers might either quit contributing to their current company or leave the money they have invested for future growth. Should the new firm also participate in the scheme, they can choose to maintain making contributions to the same fund or form a new contract with another fund manager, therefore providing seamless support for staff members as they transition between employment and guaranteeing their financial future.
This new savings plan aims to give companies a cost-effective, competitive, and flexible benefits system that fits the needs of the modern workforce while so supporting financial security, stability, and development possibilities for workers all throughout the UAE.