All you need to know about UAE’s End-of-Service Benefits Scheme
Understanding the Scheme
The End-of-Service Benefits Scheme is a voluntary program that invests employees’ end-of-service benefits in proven investment funds, aiming to provide investment returns upon employment termination.
This scheme is open to all employees, including both expatriates and UAE citizens, working in public, private, and free zone companies.
Benefits for Employers
Employers can benefit from increased job loyalty and productivity, focus on core commercial activities, and reduced costs compared to traditional gratuity schemes.
Benefits for Employees
Employees can choose from various investment options, facilitating financial planning and contributing to a more stable labor market.
To participate, employers must contract with licensed investment funds, select eligible employees, and calculate and pay the basic subscription amount within 15 days of the month.
Subscriptions and Categories
Subscriptions include basic and voluntary options, with skilled workers able to invest in low, medium, and high-risk assets. Skilled labor includes employees with a monthly salary of at least Dh4,000.
Employees can request withdrawal of voluntary contributions, while the basic subscription amount is non-refundable to employers.
Leaving or Changing Employers
If an employee leaves a job, they can choose to receive financial benefits or continue investing in the scheme with a new employer. Employers may also change fund managers.
Options include capital guaranteed portfolios, risk-based investments, and Shariah-compliant funds.
Employer Withdrawal and Suspension
Employers can withdraw from the scheme with approval, and payments may be temporarily suspended under specific circumstances.
Fund Managers’ Responsibilities
Fund managers are responsible for offering various investment options and managing a minimum of Dh1 billion worth of funds and assets.
Guildhall’s Executive Search and Recruitment Services
Looking for top talent in the UAE? Guildhall offers expert executive search and recruitment services to help you find the best candidates for your organization. Our experienced team specializes in connecting employers with the right professionals to drive success. Learn more about Guildhall.