Sultan Bin Nasser Al Suwaidi, Governor of the UAE Central Bank, and Obaid Humaid Al Tayer, Minister of State for Financial Affairs, at the FNC session in Abu Dhabi on Tuesday. Image Credit: Abdul Rahman/Gulf News

Abu Dhabi: The Federal National Council on Tuesday unanimously voted for a motion allowing citizens who quit their jobs and have served 20 years to be eligible for a pension, irrespective of their age.

The pension law which makes it compulsory for citizens to put in 20 years of service and reach the age of 50 to receive a pension breaks the constitution, which provides for equality, social justice, security and equal opportunities for all citizens, the House heard yesterday.

"The law also violates the constitution as it fails to honour the government's obligation to create the suitable conditions for service by enacting legislation protecting the rights of employees and interests of employers in view of advanced international legislation," said Dr Abdul Rahim Al Shaheen, a representative from Ras Al Khaimah.

Dr Al Shaheen called the compulsory retirement age of 50 years ‘unfair', because it deprives people who have completed the pensionable service of 20 years of their pension.

Initially, the pensionable service was set at 15 years, but in 2007, it was raised to 20 years, allowing people who were at least 40 years of age to receive a pension. Later, the law was amended to make the compulsory pensionable age 50 years.

Obaid Humaid Al Tayer, Minister of State for Financial Affairs and Deputy Chairman of the General Pensions and Social Security Authority, said the criteria were meant to ensure funds and sustainability of the authority.

"All citizens should be encouraged to stay at work and put up at least 20 years of service. They should also get a pension when they reach 50 years of age. Our goal is to keep citizens at work in the light of [the low] numbers of Emiratis in the labour market and to minimise the financial deficit," said Al Tayer.

The minister said mathematics should be taken into account. "An insured person who received a monthly salary of Dh20,000 for ten years and Dh40,000 for another ten years would have subscribed Dh360,000 at the rate of five per cent of his monthly salary. That insured person would receive Dh480,000 pensions in the first year of retirement."

Al Tayer stressed simple calculations show how any pensions fund should create criteria which help keep it operational and maintain the flow of resources.

"So the legislator took into account ways to keep the authority running, secure resources and keeping citizens at work," the minister said.

The representative said Al Tayer's response was focused only on financial aspects of the issue and ignored social aspects.

Citing individual cases where citizens had to retire early but after completing 20 years of service, Dr Al Shaheen said it was unfair to deprive these people of a pension and leave them unable to meet their obligations just because they were not 50.

"Moreover, a country like the UAE which has an unemployment rate of at least 13 per cent should allow citizens to retire if they wish, which may mitigate the problem of unemployment and offer more jobs for young citizens," Dr Al Shaheen argued.

He added the law also did an injustice to women who account for 66 per cent of the workforce in the government.

"A recent survey by the General Women's Union of 7,886 working women showed that they are largely against the criteria of 20 years of service and 50 years of age," Dr Al Shaheen said.