100 UAE dirhams
The ‘Golden Pension Scheme’ will allow employees to contribute from Dh100 onwards on a monthly basis. Image Credit: Gulf News

Dubai: National Bonds, the UAE savings scheme provider, has launched a pension scheme targeted primarily at expatriate residents working in the private sector. The ‘Golden Pension Scheme’ will allow employees to contribute from Dh100 onwards on a monthly basis.

They can take out the saved amounts under their name in addition to the gratuity provided by employers. “The scheme aims to support organizations with their employee retention efforts as well as help them plan ahead for the end-of-service financials,” said National Bonds in a statement.

National Bonds will work with employers directly in the managing of the funds. 

Pension schemes are starting to get greater visibility. This year, DIFC introduced a scheme where employees - cutting across nationalities - working at Dubai Government entities can contribute to its pension options. It could be that the pension schemes could go wider and gradually take the place of the decades’ old gratuity schemes overseen by employers in the UAE.

Predicting the size of the fund at this stage is difficult, but we are seeing a lot of demand in the market for medium- to low-risk investments. Fortunately, we have adopted a similar investment strategy and are looking to invest in shorter-term products in line with the market trend

- Mohammed Qasim Al Ali, CEO of National Bonds

The National Bonds’ ‘scheme which is targeted towards 89 per cent of the UAE’s population that are expats, will help employees of registered corporates get a head start in retirement planning and strengthen their financial resilience through the attractive competitive returns’.

Through National Bonds’ app, employees will have ‘visibility’ on how their pension portfolio is faring. They can also be part of the National Bonds’ rewards program of Dh35 million and eligible for life takaful cover.

“Today, the UAE is home to over 8 million expats,” said Mohammed Qasim Al Ali, CEO of National Bonds. “With this first-of-its-kind initiative designed especially for the private sector, we want to enable expats to invest in their future while supporting corporates with their employee retention strategy.”

“The scheme enables companies to invest in their employees’ end-of-service funds so they can benefit from additional returns on their gratuity. Not many companies do this as accumulated funds are not being invested, which ultimately deprives the employees of these benefits.”

How National Bonds' Golden Pension Scheme works

  1. National Bonds will manage the funds directly from start to finish for corporates under the Golden Pension Scheme. The company has on-boarded 8,000 employees but expect this number to grow significantly over the next few months based on demand from corporates. Several partnerships are under discussion and will be announced in the coming months.
  2. Corporate clients have the flexibility to decide the duration for which they sign up. They can sign for a minimum of 1 year and the maximum tenure is open for corporates to decide.
  3. National Bonds will have a 'sophisticated investment policy' that dictates where and how to invest the funds. This policy is biased towards income-generating assets, especially debt instruments.