Everything you need to know about the “Golden Pension Scheme” for foreign employees in the UAE

Golden Pension Scheme

National Bonds, the Investment Corporation of Dubai-owned Sharia-compliant savings and investment firm, introduced a Golden Pension program on Tuesday to assist private-sector overseas employees in investing their end-of-service benefits.

The pension plan is designed to help UAE employees bridge the retirement savings gap while also assisting employers in funding their end-of-service financial commitments.

In recent years, the UAE, the Arab world’s second-largest economy, has implemented a number of economic, legal, and social reforms to improve the business environment, recruit qualified people, and give incentives for enterprises to establish or extend their operations.

What is the Golden Pension Scheme?

Companies can enroll in the National Bonds’ Golden Pension scheme by investing all or a portion of their employees’ end-of-service benefits accrued over time. Employees have the option of contributing to the pension program for as low as Dh100 ($27.22) every month.

Employers open individual accounts for their employees under the pension program, and the money is paid proportionally.

What is a Pension Plan?

A pension plan is a benefit in which businesses make regular contributions to a managed retirement fund on behalf of their employees. The sum is calculated as a percentage of a worker’s salary. Employees can also choose to make voluntary contributions to the fund and draw from it when they retire.

Is there a Pension System in the UAE?

According to the UAE government, Emiratis working in the public and private sectors are entitled for pensions and other retirement benefits after reaching the retirement age of 49 or serving a total of 20 years.

Emirati pensions are administered in the UAE by organizations such as the Abu Dhabi Pension Fund, the Sharjah Social Security Fund, and the General Pensions and Social Security Authority.

Where will the money from the Golden Pension Scheme be invested?

According to Mohammed Al Ali, chief executive of the savings scheme provider, National Bonds would invest employees’ end-of-service rewards in money markets like bank deposits, sukuks, and the company’s income-generating real estate holdings.

For this type of investment, the corporation will take a low-to-medium-risk approach.

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Who can benefit from the UAE Golden Pension Scheme?

All expat workers in the UAE’s private sector are eligible to join the Golden Pension scheme. According to the UAE government, after reaching the retirement age of 49 or serving a total of 20 years, all individuals employed in both the government and private sectors are eligible for pensions and other retirement benefits.

Expats in the UAE can benefit from the UAE Golden Pension Scheme.

The UAE Golden Pension scheme’s primary goal is to protect the rights of expat workers and employees. The scheme allows expats to grow their savings and improve their end-of-service benefits, which will help them to future-proof their financial and retirement plans.

Please keep in mind that expats who do not wish to participate in the Golden Pension scheme may do so through other National Bonds-operated savings and investment program. The Global Savings Club, for example, is a freely run monthly savings program with a Dh100 minimum commitment.

What advantages does the UAE Golden Pension Scheme provide?

The UAE Golden Pension scheme has the following advantages:

  • Monthly contribution rates that are affordable
  • Profit margins that are competitive
  • Transparency in profit computation and stock holdings
  • End-of-service reward amounts, profit returns, and prizes are all visible.
  • The UAE Golden Pension scheme is expected to attract more foreign talent to the country and boost Dubai’s status as one of the most livable cities in the world.
  • Employees may close the savings gap and better plan for retirement since their end-of-service rewards are invested in assets like real estate and money markets, allowing their savings to increase.

Is there a Pension Plan available for International Workers?

The Crown Prince of Dubai, Sheikh Hamdan bin Mohammed, introduced a savings retirement scheme for non-Emirati personnel working in the emirate’s government and public sector in March.

They will be automatically registered in the savings plan, and the employer will pay the complete end-of-service gratuity to the plan from the date of enrollment, less any financial dues for earlier years of employment.

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A board of trustees will oversee the Dubai retirement fund program, with assistance from the Dubai International Financial Centre.

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