The UAE government is set to unveil an end-of-service benefits scheme for workers in the private sector and free zones in the country.
This was announced by Sheikh Mohammed bin Rashid on 4 September 2023 via his official X (formerly Twitter) account.
The system includes the establishment of savings and investment funds from the private sector that are supervised by the Securities and Commodities Authority in coordination with the Ministry of Human Resources. It will be optional for employers to join.
No timeline was publicly set out by the UAE government.
The scheme includes three main investment options: Risk-free investment that maintains capital; risk-based investment where the risk varies between low, medium and high; and the Sharia-compliant investment.
It sets mechanisms for each option to contribute to the achievement of the associated objectives and to enhance the competitiveness and stability of the UAE’S labour market. Employers participating in the scheme have the right to choose the employments’ categories to benefit from the system, and are asked to pay a monthly contribution. Upon termination of service, the employee receives their savings under the system.
Sheikh Mohammed bin Rashid said on X: “During today’s cabinet session, we adopted an alternative system for end-of-service rewards for workers in the private sector and free zones in the country.
“Emiratisation is through which the end-of-service reward for workers and employees is saved and invested according to various investment options. The aim is to preserve the workers’ savings, which represent the end of their services in the operating companies, and to ensure that they are invested in a safe way to guarantee their rights and achieve the stability of their families. The system also allows government sector employees to participate in it for the purposes of saving and investment.”
