The UAE is planning to introduce a savings retirement fund for non-Emirati employees that will run in addition to the existing end-of-service gratuity system.
The Federal Authority for Government Human Resources (FAHR), is consulting on the proposal, and has conducted a study, Work Incentives & End-of-Service Benefits to ascertain best practive for pension fund management going forward.
Abdulrahman Al Awar, director general of FAHR, said: "Setting up investment funds for the retirement benefits of UAE expats will help employees and officials to properly plan for the future by taking advantage of end of service benefits, and utilise their financial resources after retirement. It will also provide employment opportunities for new generations, or the so-called millennials,"
Establishing such systems or savings funds for end-of-service benefits in all sectors is an important strategic step and a new experience of its kind in the region."
Al Awar added: "Establishing such systems or savings funds for end-of-service benefits in all sectors is an important strategic step and a new experience of its kind in the region."
FAHR in February said that it planned to "enhance and improve" the range of benefits awarded to foreign-national employees. The idea behind the initiative is to attract and retain talent.
Under the current system, employees leaving a UAE-based organisation receive a gratuity payment after completing a minimum of one year of service. The amount is calculated based on basic salary and length of employment.
According to a report in Abu Dhabi-based The National, the retirement fund will collect end-of-service contributions from employers and these will subsequently be invested.
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