Dubai International Financial Centre (DIFC) has launched a pension-style savings scheme for employees that will replace the end of service gratuity for all employees in the free zone from January 2020.
According to a statement released by the centre, the Employee Workplace Savings (DEWS) scheme, will offer a low-cost investment platform for receiving and managing mandatory end-of-service contributions on behalf of employees, similar to the pension system operated in the United Kingdom.
Employees can also add any voluntary savings, including cash or cash equivalent options for those who do not want to take investment risks with their contributions.
Equiom, a global trust services provider, is the master trustee of the DIFC Employee Workplace Savings (DEWS) plan with Swiss insurer Zurich Middle East selected as the scheme administrator. Global consultancy Mercer will assist Zurich as the scheme's investment adviser, and Smart Pension, a defined contribution master trust pension scheme for UK employers, will act as the technology services provider.
"The new Dews scheme will reinforce our position as a jurisdiction that attracts and retains the very best professional talent from across the globe in accordance with best practice, including employee benefits," said Arif Amiri, chief executive of DIFC Authority, in a statement.
Zurich will soon begin the enrolment process with DIFC employers required to participate in the DEWS plan. Walter Jopp, CEO of Zurich Middle East, said: "We are pleased to have been selected by Equiom in conjunction with the DIFC Authority in what is a transformational opportunity for better financial services in the region. We look forward to working with the DIFC Authority and Equiom in providing a truly world class solution for the DIFC community."
The introduction of the new scheme will allow companies based in DIFC to know exactly what their liabilities to employees are, without any liability once paid. Meanwhile, employees will have secure benefits, irrespective of an employer going out of business, while having the option to earn a return on an employer's monthly contributions and to make their own contributions in a very cost-effective and simple way.
DIFC said the next step will see a DEWS supervisory board set up to oversee the scheme's governance and commercial aspects, comprised of DIFC Authority representatives, employer and employee representatives and an independent oversight.
The Dubai Financial Services Authority will oversee all regulatory aspects of the master trustee and scheme administrator's duties.