Dubai: The Steering Committee of the ‘Savings Scheme for Foreign Employees in the Government of Dubai’ held its first meeting on Tuesday to discuss the plan of enrolling foreign employees into the scheme.
Enrolment and contributions
Foreign employees working in government entities are eligible to join the scheme according to job grades and time of service. The employer and the Department of Finance will lead this. The employer will contribute the total end of service gratuity to the scheme, starting from the date of joining the scheme, without including the financial dues for previous years of service to which current legislation applies. The percentage of the contribution to the scheme will equal the end of service benefits due to the employee, in accordance with Human Resources legislation. In the event that the employee is promoted or has changed his role, a change in contributions will come into effect.
The rate of return will depend on the amount invested by the employee, how it is distributed across available investment portfolios, and the risks associated with it. Employee participation in the scheme will stop at the end of their service. At this point, employees have the right to withdraw their entire end of service gratuity amount, or can choose to remain in the scheme, should they desire to.
In addition to the end of service gratuity that the employer is mandated to pay, the employee can make personal contributions to the scheme if desired and has the right to add or withdraw any personal savings from the scheme at any time.
The Steering Committee clarified that the scheme would provide several investment portfolios with varied returns and risks. It also includes Islamic Shariah compliant portfolios. All employees will be enrolled by default in the capital protection portfolio, at which point they have the right to choose their preferred investment portfolio approach.
The employee can deposit all savings in one investment portfolio and has the option to choose several investment portfolios at the same time. For example, employee A can deposit (100 per cent) of the savings in a medium-risk portfolio, while employee B can choose to deposit (30 per cent) in a high-risk portfolio, (30 per cent) in a medium-risk portfolio, and (40 per cent) in a low-risk or capital protection portfolio.
Abdulla Al Basti, Secretary-General of The Executive Council of Dubai and Chairman of the Steering Committee, said the savings scheme will play a key role in enhancing the economic and social stability that Dubai offers its employees.
He said: “With the scheme in place, Dubai will continue to be an attractive career destination that appeals to outstanding talent and a preferred destination for personal and professional stability.”
The scheme was initially launched by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council, to encourage employees with various saving opportunities across financial portfolios.
The Steering Committee is currently working on developing a roadmap that will enroll Dubai government employees in phases to ensure the establishment of an integrated and sustainable system that protects employees’ rights. Further details will be communicated in the next stages of the plan.