UAE’s New End-of-Service Scheme: How to Register
The UAE has launched an innovative alternative end-of-service scheme, providing employees with choices for financial benefits or ongoing investment after the termination of their employment contracts. Companies interested in participating can approach the Ministry of Human Resources and Emiratisation (MoHRE) or the Securities and Commodities Authority for registration.
During a recent media briefing, Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratisation, emphasized that participation in this system is entirely optional for both employers and employees.
This unique scheme is open to employees across various sectors, including public and private, as well as freezone entities. Employers opting for the scheme have the flexibility to designate staff members who will be part of it.
Employees can make a pivotal choice: they can either receive financial benefits upon termination of their employment contract or continue to invest in the end-of-service scheme.
Dr. Al Awar highlighted that employees have the option to request the withdrawal of either the entire or a portion of their voluntary contribution amounts and investment returns.
This new end-of-service scheme for UAE employees revolutionizes the traditional gratuity payment system. It prioritizes safeguarding employee dues while ensuring secure investments. Notably, it introduces an additional voluntary contribution option, providing subscribers with opportunities to increase their end-of-service benefits by selecting high-return funds.
How to Register
Employers who wish to register in the scheme need to follow these steps:
- Submit a registration request to the Ministry of Human Resources and Emiratisation.
- Choose an approved investment fund for the scheme.
- Select the employees to be enrolled in the scheme while ensuring their entitlements from previous periods are preserved.
- Select the investment fund and sign the subscription contract, identifying the fund administrator.
- Establishment staff’s participation and registration in the scheme can be conducted through the fund administrator by opening a savings account for beneficiaries.
- After registration, the employer will transfer a voluntary monthly contribution from the beneficiary’s salary. These funds can be transferred as a lump sum directly into the scheme.
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