UAE’s new end-of-service scheme: MoHRE launches consultation to boost savings
MoHRE studies proposals to invest employees’ end-of-service benefits via savings funds
The Ministry of Human Resources and Emiratisation (MoHRE) has announced the completion of the evaluation phase for policies related to the Alternative End-of-Service Benefits Savings Scheme, with further enhancements expected in the coming period.
This follows the review of feedback and proposals submitted by stakeholders until February 28, aiming to protect employee rights and support a stable UAE labour market.
The Ministry highlighted that the public and interested stakeholders can participate in the digital consultation through the UAE Government Portal (Sharek.Emarat). Inputs collected will inform decision-making and help improve customer satisfaction and confidence.
Key proposals from stakeholders
Among the main suggestions received were:
Transparency in investment funds: Requests for periodic performance reports including returns, fees, and risks to strengthen public confidence.
Practical comparisons: Examples showing expected returns from the alternative savings scheme versus traditional end-of-service gratuity benefits.
The Ministry clarified that eligible participants include private-sector and free-zone employees, investors, self-employed professionals, holders of freelance work permits, UAE nationals in government and private sectors, and non-nationals working in government entities and affiliated companies.
The survey also measured awareness of the optional scheme, from high awareness to no prior knowledge.
Investing end-of-service benefits through savings funds
Respondents shared views on investing contributions via approved savings funds, with options ranging from excellent idea, good idea, unsuitable, or unsure.
The consultation also explored potential challenges:
Limited awareness among employees and employers
Procedural complexity
Preference for the traditional gratuity system
Difficulties in selecting the right investment pathway
Participants weighed the ideal timeframe for maximising benefits: less than five years, five to ten years, more than ten years, or lack of knowledge.
Communication channels for awareness
Participants identified preferred channels for updates and awareness materials:
Ministry’s official website
Social media platforms
Workshops and seminars
Email and SMS notifications
Factors encouraging adoption included clarity of procedures, flexibility in managing contributions, government guarantees, and employee education programs. Stakeholders were also invited to submit further proposals to enhance scheme benefits.
Alignment with UAE government direction
MoHRE emphasised that the consultation outcomes will guide policies that protect employee rights and promote a sustainable work environment. Feedback will align with government directives to ensure labour market stability and workers’ rights in the UAE.
Strengthening financial security
The initiative forms part of broader UAE efforts to advance the labour environment and safeguard employees’ financial security.
Launched under Cabinet Resolution No. (96) of 2023, the optional scheme offers a sustainable alternative to traditional gratuity benefits, providing attractive investment returns and promoting a culture of savings.
Under the scheme, private sector and free-zone employers can pay monthly contributions into approved funds, including Lunate, First Abu Dhabi Bank, Daman Investments, and National Bonds. Companies may register directly through the funds’ platforms or via the Ministry’s portal.
