Working in Abu Dhabi but worrying about retirement-planning?
The Golden Pension Scheme could be the answer to all your problems as it looks set to help expat employees in the private sector with their financial planning.
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Announced by National Bonds, a savings company owned by the Investment Corporation of Dubai, the scheme is targeted at employees looking for simplicity and low-risk investment.
With an Abu Dhabi business already signing up to the Golden Pension Scheme, all it takes is for the employer to enroll their staff into the National Bonds setup.
Golden Pension Scheme: Key points
The two main points to remember are that the employee can invest as much as they want in the scheme, whenever they want, and so can the employer – albeit separately.
Under the plan, an employer has the choice to either invest the entire end-of-service benefits – accumulated by the employee during their years of service, previously paid when a person leaves their job and known as a ‘gratuity’ – as a lump sum or invest a portion.
But the key is the Golden Pension Scheme’s flexibility, with employees also having the option to contribute as little as Dhs100 per month of their basic salary.
On the National Bonds app, you can even watch your pension savings grow in real-time.
Employees can only withdraw funds from a National Bonds’ pension scheme, put there by their employer, when their employer allows them.
But they can withdraw from their own Golden Pension Scheme contributions whenever they like.
Golden Pension Scheme: Where is it available?
The Golden Pension Scheme has made an instant impact.
A Dubai company with 9,000 employees has already subscribed, National Bonds said.
The move comes after employee financial issues were thrust into the spotlight by the Covid-19 pandemic.
An April survey found that 45 percent of UAE residents are yet to start planning for their pension-age years.
So the move from National Bonds is intended to stem the tide, adding confidence to workers in Dubai and Abu Dhabi.
Expat savings scheme explained
The scheme appears to be built on proposals originally outlined in March by His Royal Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, in his position of Chairman of the Executive Council.
This expat savings scheme initiative was set up to protect the rights of employees, providing the opportunity to increase savings and enhance any end-of-service benefits.
It also sets out to provide assistance in financial planning and future-proofing.
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UAE unemployment insurance scheme
It also comes just a day after The Ministry of Human Resources and Emiratisation (MOHRE) launched the unemployment insurance scheme for government and private sector employees.
Under the new plans, compensation will be paid monthly based on 60 percent of the employee’s basic salary and subject to a maximum Dhs20,000 per month if they lose their job.
The new law applies to all workers in the UAE – meaning it impacts both federal government employees and private sector staff.
First announced in May, it excludes part-time employees, retirees who have a pension and those under the age of 18.
The Ministry says the scheme will ensure a sustainably decent life for UAE residents if they are ever unemployed.
It also aims to boost the attractiveness of the jobs market in the UAE and enhance the global competitiveness of the UAE as a place to work.
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