UAE’s Alternative End-of-Service Benefits Scheme: MOHRE announces accredited investment funds

Dubai: In the UAE, employees can enhance their end-of-service benefits through the Alternative End-of-Service Benefits (ESOB) Scheme, a voluntary savings system introduced in 2023. The scheme was implemented by the Ministry of Human Resources and Emiratisation (MOHRE) in collaboration with the Securities and Commodities Authority (SCA).

On Wednesday, MOHRE reminded companies that official funds under the scheme offer flexible solutions, allowing businesses to manage employee savings through secure and reliable investment opportunities. The scheme serves as an optional alternative to the traditional end-of-service gratuity system.

According to MOHRE, employees enrolled in the scheme will benefit from better financial planning, higher gratuity payouts, and the ability to continue investing their entitlements even after leaving their jobs. For employers, the scheme helps enhance job loyalty, reduce administrative costs, and attract top talent.

Employees can tailor their investment choices to suit their financial goals. The following investment funds offer flexible options in both conventional and Sharia-compliant structures. All funds listed below are licensed and regulated by the UAE’s Securities and Commodities Authority (SCA).

Lunate
• Phone: 02 6927213
• Email: eosb@lunate.com
• Website: www.lunate.com

First Abu Dhabi Bank
• Phone: 02 6920609
• Email: fabeosb@bankfab.com
• Website: www.bankfab.com

Daman Investments
• Phone: 04 6109666
• Email: damaneos@daman.ae
• Website: www.daman.ae

National Bonds
• Phone: 600 522279
• Email: mohre@nationalbonds.ae
• Website: www.nationalbonds.ae

Each investment fund provides an online platform for employers and employees to monitor savings and investment returns. Employees can adjust their portfolio based on their financial goals, reallocate funds across different investment options, and make additional contributions as needed.

The Alternative End-of-Service Benefits System is a voluntary scheme that allows employers to invest their employees’ end-of-service benefits into accredited investment funds. The objective is to generate returns on employees’ gratuity entitlements, ensuring long-term financial security.

Introduced by MOHRE and governed by Decree-Law No. (33) of 2021, the scheme enables participating employers to transfer end-of-service gratuities into professionally managed funds regulated by the SCA. Employees benefit from investment returns, which they receive along with their gratuity at the end of their employment.

Employers participating in the scheme are required to register their employees and make monthly contributions to the chosen investment fund as follows:

• 5.83 per cent of the employee’s basic monthly salary if they have worked for less than five years.
• 8.33 per cent of the employee’s basic monthly salary if they have worked for more than five years.

Contributions must be transferred to the investment fund within 15 days of the start of each calendar month.

Employers can enrol in the scheme by submitting a request to MOHRE and selecting an approved investment fund from the list above. They must then register eligible employees while ensuring their entitlements from previous employment periods remain protected under UAE Labour Law.

Each investment fund may have additional steps specific to its registration process.

Employees are entitled to receive the total contributions made by their employer, along with any investment returns, within 14 days of employment termination. They also have the option to continue investing in the scheme after leaving their job. Employees can withdraw part or all of their voluntary contributions and investment returns at any time during employment, subject to the fund manager’s terms.