The study says establishing a pension scheme, which includes both private and public-sector expat employees, will have a “positive impact socially and economically on all parties of the production cycle and stimulate the national economy”.
“The scheme would be a major strategic step and a new experiment of its type in the region,” said the study, according to Gulf News.
Under the current end of service gratuity system, all employees who have worked at least one continuous year are entitled to a gratuity payment at the end of their employment – regardless of whether they quit or are fired.
The amount is calculated based on the most recent salary paid into the account.
The study based its investigation into pension schemes on “best global practice in the field”, Gulf News reported.
It suggests that employers deduct a monthly sum from an expat’s salary and deposit it in a fund operated by a specialised managing institution.
“The new scheme will help increase employee dues and reduce the expenses of employers, whether government or private bodies, thus stimulating the national economy,” the report says.
The study recommends that participation by employers in the scheme should be voluntary. It also suggests that employers should be able to choose between implementing the pension scheme or opting to stay with the traditional end of service gratuity scheme.
Additionally, the report says employees should have the option to make additional monthly contributions to the scheme if they wish.
Current employees who are in end of service schemes would have gratuity calculated until the new pension fund is implemented. They would then have this gratuity paid out once they quit the job, the report says.