UAE: New end-of-service benefits scheme now in force; here’s what it offers

UAE: New end-of-service benefits scheme now in force; here’s what it offers

Image: MoHRE

The Voluntary Alternative End-of-Service Benefits Savings Scheme – unveiled by the UAE government in September – is now in effect.

The initiative, which came into force on November 1 is managed by the Ministry of Human Resources and Emiratisation (MoHRE) and the Securities and Commodities Authority (SCA).  The scheme is not compulsory for employees or employers, and it does not have a minimum salary requirement to participate.

The scheme is open to both expatriates and UAE citizens and offers an alternative system to the existing gratuity payment system.

According to MoHRE, the scheme aims to boost the ease of doing business and enhance UAE’s attractiveness to talents and expertise, as it offers investment returns on employees’ end-of-service gratuity by investing it in investment funds approved by the ministry and SCA.

The SCA will grant licences to investment service providers or fund managers for conducting activities under the new scheme.

Regulatory authorities of financial free zones in the UAE will manage the drafting and implementation of legislation, regulations, and rules for the scheme for employers and employees in the free zones.

Based on a Cabinet Resolution, and in coordination with the Securities and Commodities Authority, we are pleased to announce that the Voluntary Alternative End-of-Service