Dubai: Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, on Wednesday launched a savings fund for expats working in the public sector. The fund will be optional for private sector firms.
The fund aims to protect the rights of expatriate employees and give them opportunities to maximise their savings. The first-of-its-kind initiative in the region represents an important addition to the currently implemented end-of-service benefits system.
The initiative aims to encourage a culture of savings and financial planning among expatriate employees.
The scheme will be supervised by the Dubai International Financial Centre in partnership with several international investment firms that provide attractive and safe investment opportunities.
Objectives of the scheme:
- Ensure and protect the rights of employees and provide them with opportunities to develop their savings and end-of-service dues
- Attract the best talent and enhance the flexibility and attractiveness of the labour market in Dubai similar to other leading nations
- Drive financial literacy and foster a culture of saving among employees to assist in creating a financial plan that serves their future
The announcement was made during a meeting of The Executive Council of Dubai held on Wednesday in "Deep Dive Dubai".
Sheikh Hamdan stressed that the scheme will play a pivotal role in the continuous development of the government sector’s capabilities. He said the the scheme will attract qualified professionals across various fields, while ensuring that all employees, whether citizens or residents, are provided with the support they require.
The scheme guarantees growth opportunities and high quality of life for all government employees. Throughout their career and at the end of their service.
"The savings scheme is a new step towards attracting more talent, innovators and investors across various fields, as we look to consolidate Dubai's position as a leading city that delivers optimum work and living standards," said Sheikh Hamdan.
About the saving scheme
* Enhance end-of-service indemnities in the Government of Dubai;
* Provide a series of investment mechanisms in line with employees’ preferences, including the provisions of Islamic Sharia, with a guarantee of capital protection for employees who do not wish to invest;
* Deposit financial dues starting from the date of plan enrolment; and
* Study the extent to which this system can be voluntarily applied to private-sector employees in Dubai, following coordination with relevant federal and local entities.
- The savings scheme is managed by a board of trustees and international investment institutions, under the supervision of the Dubai International Financial Centre.
The scheme provides employees an opportunity to save across different financial portfolios to grow their individual savings.
The Scheme will also protect and manage dues by depositing them in the scheme starting from the date of enrolment. Therefore, it will not include any financial dues from former years of service to which the current legislation applies. Additionally, employees will be able to choose multiple investment structures including traditional investment funds, and others compatible with Islamic Sharia. Employees who do not wish to invest their benefits will also be provided with options that ensure capital protection.
Following the launch, Sheikh Hamdan directed the formation of a steering committee headed by the General Secretariat of The Executive Council.
Members of the committee include:
- Department of Finance, Dubai Government Human Resources Department;
- Government of Dubai Legal Affairs Department;
- Supreme Legislation Committee;
- Dubai International Financial Centre
The committee will develop an action plan, set executive procedures, oversee the workflow of the scheme and achieve its objectives. They will also examine the possibility of implimenting the new system to the private sector in Dubai on a voluntary basis.
Under the supervision of DIFC, the board will oversee the savings scheme within a governance system. The system will ensure that the scheme serves the employees’ interests, provides multiple investment avenues, and supports the planning and management of human resources in Dubai.