UAE announces new benefits aimed at safeguarding worker’s savings while promoting investments
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UAE announces new benefits aimed at safeguarding worker’s savings while promoting investments.
His Highness Sheikh Mohammed bin Rashid Al Maktoum, the Vice-President and Prime Minister of the UAE and Ruler of Dubai, has just unveiled a ground breaking plan to revolutionise benefits for employees.
Here is everything you need to know about this game-changing development!
Protecting Workers’ Future – For Both Private Sector & Free Zone Employees
The main goal of this new system is to safeguard the hard-earned savings of UAE employees and ensure they are invested wisely. Sheikh Mohammed emphasised that the system’s objective is to protect workers’ rights and provide stability for their families. This exciting change isn’t limited to a select few. It applies to employees in both the private sector and free zones, and even government employees can join in on the action.
How Does It Work?
So, how does it all work you ask? Employers can opt to participate in this system by making monthly contributions on behalf of their employees, regardless of their job level. What’s truly exciting is that it offers three distinct investment options:
- Risk-free capital guarantee: For those who prefer a safe and steady approach.
- Investments with varying risks: Ranging from low to medium and high, catering to different risk appetites.
- Sharia-compliant investments: Aligning with Islamic principles for those who prefer ethical investing.
When the work relationship between the employer and employee ends, the accumulated end-of-service benefits and returns will be paid out.
Benefits for Employers Too
This new system isn’t just a win for employees; it’s a smart move for employers as well. In the long run, it’s expected to cost less than the traditional system while offering more attractive terms. It’s a win-win situation!
Building On Past Success
This isn’t the first time the UAE has taken steps to enhance end-of-service benefits. In 2022, Dubai introduced a similar savings scheme for expatriates working in government departments. This integrated system offers employees a range of saving opportunities across various financial portfolios, further boosting their benefits and savings.
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Collated and Compiled by the internal staff of Karma Global with the knowledge and expertise that they possess, besides adaptation, illustration, derivation, transformation, collection and auto generation for its monthly newsletter Issue 16 of October 2023 and in case of specific or general information or compliance updates for that matter, kindly reach out to the Marketing Team – kush@karmamgmt.com / yashika@karmamgmt.com