Savings scheme

The Dubai Payroll Savings Plan has a wider reach

While contributory pensions, provident funds, and other common savings/investment schemes with employer sponsorship are known by different names, they all serve the same purpose of enrolling employees in a savings scheme. mandatory which comes to their aid when they retire or seniority. comes to an end.

Dubai is not new to ESPs. In February 2020, the Dubai International Financial Center (DIFC) introduced the DIFC Employee Workplace Savings Plan (DEWS). The scheme replaced the end-of-service gratuity payment scheme that had been in place since the DIFC was established in 2004.

The DEWS plan, a master trust structure domiciled in the DIFC, collects compulsory contributions from employers in proportion to the employee’s benefits under the old structure of end-of-service benefits.

In addition to the employer’s contribution, most of these plans allow employees to set aside part of their salary for long-term goals, such as paying for children’s school fees or buying a house. In different countries, employer contributions vary according to local regulations.

The Government of Dubai’s new savings plan will offer its expatriate employees the opportunity to improve their end-of-service benefits through multiple savings and investment plans managed under the supervision of the DIFC and a management board. administration, and managed by reputable international financial institutions.

Unlike the current structure of end-of-service benefits, the new plan gives employees the flexibility to take advantage of various investment opportunities, including those compliant with Shariah, to grow their savings.

In announcing the launch of the scheme, the government hinted that it was considering exploring the possibility of extending it to the private sector.

A first for the region, the scheme will clearly establish a pioneering social security structure aimed at protecting the rights of employees in the country that will make the UAE an attractive career destination for the global talent pool.

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