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The Ministry of Human Resources and Emiratisation (MoHRE) has introduced a voluntary Savings Scheme for private sector workers, offering an alternative to the traditional end-of-service gratuity system.
This initiative aims to improve business operations and offer workers a better way to grow their savings.
Benefits for employers and workers
- Attract and Retain Talent: The scheme helps companies attract skilled employees and retain them by offering financial security through investment opportunities.
- Financial Growth for Workers: The scheme allows workers to grow their savings by investing in accredited funds, providing returns over time.
- Reduced Employer Costs: The cost of participating in the Savings Scheme is lower than paying traditional end-of-service gratuities, as contributions are based on an employee’s current salary, not their salary at the end of service.
How the scheme works
- For Employers: Companies can join the Savings Scheme by applying through MoHRE, selecting an accredited investment fund, and paying subscription fees for employees.
- For Employees: Workers can keep the gratuity they earned before joining the scheme. Once enrolled, their end-of-service gratuity will be calculated based on the new system, with all accumulated earnings paid out at the end of their contract.
- Additional Contributions: Employees can contribute an additional 25% of their annual salary to boost their savings and investment returns.
Flexibility for workers
- Portability: If an employee switches jobs, they can either withdraw their savings or keep the funds invested with the same provider. The new employer can also continue contributing to the same fund or choose a new one.
- Investment Options: Skilled workers can choose from various investment funds, while unskilled workers are enrolled in a Capital Guarantee Portfolio.
Who can participate?
- Self-Employed and Freelancers: Individuals with freelance or self-employed work permits can also join the scheme, making additional voluntary contributions to grow their savings.
- Other Eligible Groups: Non-citizen employees in government entities and Emirati employees in both public and private sectors can also register, with the option to make voluntary contributions.
How to apply?
Employers interested in enrolling in the Savings Scheme can apply through MoHRE’s official website. The Ministry provides a list of accredited investment funds, along with comprehensive details about the scheme.
tanvir@dubainewsweek.com
