Dubai: The Ministry of Human Resources and Emiratization (MoHRE) has underscored the success of its voluntary ‘Savings Scheme’ for private-sector workers, a new approach to end-of-service benefits that supports both business efficiency and worker financial security.
Designed to protect employees’ financial entitlements and enhance talent retention, the Savings Scheme enables participants to build wealth through accredited investment funds.
Benefits of scheme
According to MoHRE, the Savings Scheme offers significant advantages for both employers and employees, including:
- Attracting Talent: A competitive benefit that improves companies’ ability to attract skilled workers.
- Enhancing Financial Security: Provides a structured way for employees to grow their savings through investment.
- Employer Savings: Medium-term costs are reduced, as contributions are based on the employee’s salary at the time of payment, rather than their end-of-service salary.
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 Benefits Scheme – Savings Scheme, for private sector employees, comes into force.
We take you over the… pic.twitter.com/ESJnUvZEyh
— وزارة الموارد البشرية والتوطين (@MOHRE_UAE) November 1, 2023
How the Scheme Works
Private sector companies can participate in the Savings Scheme by enrolling their employees through MoHRE’s service channels. Companies select from a group of vetted investment funds, approved in partnership with the Securities and Commodities Authority (SCA), which meet strict standards for managing savings responsibly.
- Opt-In Enrolment: Companies apply for the Scheme through MoHRE’s platforms.
- Employee Options: Employees can make additional contributions (up to 25 percent of their annual salary) to increase savings and investment returns.
- Flexible Transfers: Employees switching jobs can either withdraw their savings or leave them invested.
Features of the Scheme
- Capital Guarantee Portfolio: Provides a safe option for unskilled workers, while skilled workers can choose from a variety of investment plans.
- Additional Categories: Freelancers, government workers, and Emiratis in the private sector can voluntarily enroll.
- Retained Gratuity: Workers keep any gratuity accrued under the old system until they enroll in the new Scheme, with the benefits adjusted from their registration date.
MoHRE has encouraged companies to adopt the Savings Scheme as a means to boost their reputation and promote employee loyalty. Participating companies position themselves as attractive workplaces focused on employee financial growth and security.
The proactive approach not only supports a sustainable workforce but also helps manage future financial obligations by replacing traditional gratuity systems with flexible, ongoing contributions.