On Monday, Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, unveiled a new end-of-service benefits system catered to private sector and free zone employees. This initiative seeks to safeguard employees' savings, ensuring both safe investments and security for their families.
During a UAE Cabinet meeting led by Sheikh Mohammed, he detailed that this voluntary system will allow the establishment of savings and investment funds from the private sector. Supervision of these funds will be handled jointly by the Securities and Commodities Authority and the Ministry of Human Resources and Emiratisation.
Addressing the public on X, the platform succeeding Twitter, Sheikh Mohammed emphasized the objective behind this system. "Through this system, employees can save and invest their end-of-service benefits in various investment options,” he stated. "The ultimate aim is to ensure the rights of these employees, safeguard their savings, and offer stability for their families."
While the scheme predominantly targets private sector and free zone workers, public sector employees are not excluded. They too have the option to engage in this savings and investment initiative. However, specific details regarding a timeline for its implementation were not provided during the announcement.
A subsequent statement from the UAE Government Media Office elaborated on the scheme’s structure, indicating that employees will have three investment options:
1. Risk-free investment that preserves the principal amount.
2. Risk-based investment with variable risk levels, including low, medium, and high.
3. Sharia-compliant investment.
For companies opting into this system, there will be an obligation to contribute monthly. Upon the conclusion of their service, employees can expect to receive their accumulated savings, supplemented by returns from their chosen investment funds.