The Ministry of Human Resources and Emiratisation (MoHRE) has launched the voluntary 'Savings Scheme,' a new system that offers private-sector employees an alternative to traditional end-of-service gratuities.
This initiative, introduced in collaboration with the Securities and Commodities Authority (SCA), aims to enhance ease of doing business in the UAE by strengthening employee financial security and helping companies attract top talent.
The Savings Scheme enables workers to grow their end-of-service benefits through accredited, secure investment funds, offering a proactive approach to managing financial entitlements. Employees can build their savings with potential investment returns, allowing for greater financial growth and security. Moreover, participants can make additional contributions, up to 25% of their annual salary, with flexible options to withdraw contributions and returns based on specific terms.
Companies benefit as well, with cost savings over traditional gratuity payouts. The scheme’s contribution model, based on the employee's current basic salary rather than their final salary, is often more cost-effective for employers in the medium term. This reduces financial obligations and helps companies establish themselves as attractive workplaces that prioritize employee wellbeing.
The Ministry encourages private-sector firms to join the scheme, which also offers optional participation to freelancers, self-employed individuals, and non-citizen employees in government-linked organizations. Emirati employees can also join through voluntary contributions, with government and social security authorities covering their end-of-service payments.
MoHRE’s website provides further details on the scheme, investment options, and the list of accredited funds for interested companies and workers.
News Source: Emirates News Agency
