GPSSA Offers Emiratis Opportunity to Boost Pensions Through Purchase of Service Years

The General Pension and Social Security Authority (GPSSA) has introduced a valuable opportunity for insured Emiratis to enhance their pension benefits by purchasing inactive service years in addition to their actual employment period, as per federal pension laws.

This initiative aims to allow individuals to retire early with a more lucrative pension rate.

According to the GPSSA, the rules for purchasing service years differ across two key federal laws. Under Federal Law No. 7 of 1999, insured individuals must have worked for at least 20 years in an entity to be eligible. Males can purchase up to five additional years, while females may purchase up to ten. For those covered by Federal Law No. 57 of 2023 (applicable to those joining employment after October 31, 2023), a minimum of 25 service years is required, or 15 years if the insured is aged 60 or above.

The pension increase granted through the purchase of service years also varies. Under Federal Law No. 7 of 1999, each purchased year contributes a 2% pension increase, with an increase of 2.67% for individuals who contribute for 25 to 30 years. Meanwhile, Federal Law No. 57 of 2023 grants 4% for each year worked beyond 30 years.

Costs for purchasing service years are based on the insured’s contribution account salary and vary between the two laws. For instance, a person earning AED 20,000 could pay AED 240,000 under the 1999 law and AED 312,000 under the 2023 law for five years of service.

To qualify, individuals must be employed, and any incomplete payments for purchased service years will be calculated based on the amounts paid. If the insured passes away before completing payments, the amounts will continue to be collected from their heirs.

News Source: Emirates News Agency