Dubai: If you are an expat working in the UAE and have not yet started saving for retirement, you may now have an option to receive a pension at the end of your tenure.
National Bonds, a Shari’a-compliant savings and investment company owned by the Investment Corporation of Dubai, launched the Golden Pension Scheme on October 11. The new scheme will give companies in the UAE the option to sign up their employees for pension plans and help them save for retirement. Here is all you need to know about the Golden Pension Scheme for expatriate workers in the UAE.
What is the Golden Pension Scheme?
The scheme by National Bonds is available to all UAE establishments in the public and private sector. However, according to National Bonds, it is targetted at expatriate workers in the UAE who may be looking for financial stability post retirement.
Companies that want to enroll employees for the pension scheme will have to be registered with National Bonds and sign up for the Golden Pension Scheme. The companies can determine how many people in their workforce are enrolled for the scheme and the amount allocated under the scheme.
If your company does enroll you for the scheme, you also have the option to add additional savings of your own to this savings programme, by making monthly contributions of as little as Dh100 per month.
According to National Bonds, Sukuks, which are sharia-compliant saving bonds, will be issued under employees' accounts with National Bonds.
Can I redeem parts of the pension, whenever I need it?
National Bonds clarified that the Sukuk issued will be locked for redemption - and can only be initiated based on the company’s request. So, unless your company requests for it, you cannot access the pension savings. However, if you have been contributing additional savings to the scheme from your end, that amount can be accessed by you when you need it.
How is the pension scheme different from gratuity?
As per the UAE Labour Law – Federal Decree-Law No. 33 of 2021 – employees in the private sector are entitled to gratuity at the end of their tenure.
The Golden Pension Scheme is an optional scheme that employers in the UAE can sign up for.
In an interview with Gulf News, Mohammed Qasim Al Ali, Group CEO at National Bonds stated that Golden Pension Scheme is not a replacement for gratuity. Instead, this scheme may be considered as an enhancement to the gratuity being offered by companies.