Pensions and end of service benefits in UAE are crucial components of employee compensation and financial planning, providing financial security during retirement or upon leaving an employer. These benefits vary by region and employment terms, but their importance in ensuring the well-being of workers cannot be overstated.
Pensions are available to eligible Emirati and GCC national employees in the UAE. Please review the terms and conditions concerning age requirements, years of service, eligibility criteria, and employer contributions to the pension fund.
Pensions and End of Service Benefits
Pensions and End of Service Benefits in UAE
In the UAE, there are several pension funds with different roles. The General Pension and Social Security Authority (GPSSA) manages pension services for citizens working in federal government entities and the private sector across all emirates, except for those in Abu Dhabi’s public and private sectors and Sharjah’s public sector.
Mandatory Registration and Contributions: Employers must register and contribute on behalf of eligible employees within 30 days of their employment. Eligible employees should be UAE nationals aged 18 to 60 and medically fit upon appointment.
Conditions for Employer Pension Contributions: To enable the employer to contribute to the pension, the employee must:
- Be a UAE national.
- Be between 18 and 60 years of age.
- Be medically fit upon appointment, as confirmed by a medical report from an authorized medical authority approved by GPSSA.
Employee Contributions: In accordance with Federal Law No. 7 of 1999 for Pensions and Social Security, as well as its amendments, employees are required to make a monthly contribution equal to 5% of their salary to GPSSA. Simultaneously, employers are obligated to contribute 15% of the employee’s salary, resulting in a total monthly contribution of 20% to GPSSA.
Pension Eligibility: The GPSSA pension scheme encompasses provisions for aging, disability, death, work-related issues, and occupational illnesses. Additionally, under Article 16 of the federal pension law, an employee qualifies for a pension if they meet the following criteria:
- Completion of 20 years of service.
- Attainment of at least 50 years of age.
Furthermore, The pension amount grows by 2 percent annually for each year of service beyond 20 years, up to a maximum of 35 years of service.
Upon completing 35 years of service, an employee becomes eligible for a pension equivalent to their salary.
If an employee surpasses 35 years of service, they will receive a pension equal to three months’ salary for each additional year of service.
End-of-Service Benefit: Employees who have not fulfilled 20 years of service will be entitled to receive an end-of-service benefit.
For employees who voluntarily resign before retirement, eligibility for the end-of-service benefit requires a minimum of 19 years and 11 months of service.
Abu Dhabi pensions
In Abu Dhabi, the Abu Dhabi Retirement Pensions and Benefits Fund oversees pensions for UAE nationals working in Abu Dhabi. However, it does not handle pensions for GCC nationals, which is managed by GPSSA.
Additionally, the emirate of Abu Dhabi has its own pension law, Law No. 2 of 2000, governing Civil Retirement Pensions and Benefits.
For further details regarding ADRPF, you can explore:
Dubai Government's Retirement Guidelines
H. H Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has issued Decree No. 21 of 2017, which approves the retirement and pension procedures for Dubai government employees. The purpose of this decree is to ensure fairness and equal opportunities for government employees in Dubai and to safeguard the rights of retirees.
As per the decree, the Dubai government’s human resources department (DGHR) will establish a committee responsible for evaluating employee retirement requests. The committee will be chaired by a DGHR representative and include members from Dubai’s Department of Finance, the General Secretariat of Dubai Executive Council, and the General Secretariat of Dubai’s Supreme Legislation Committee.
The decree outlines the retirement procedures. Dubai government entities are required to forward their employees’ retirement requests to DGHR. These applications must provide clear reasons for retirement, furnish all necessary information and documents, and adhere to any additional requirements specified by the committee. It is the responsibility of the government entity to complete the application, fulfill the requirements, and compile the necessary documents before submission to the committee.
DGHR is tasked with monitoring the committee’s recommendations and forwarding them to the General Secretariat of Dubai’s Supreme Legislation Committee for the necessary legal measures before presenting them to His Highness the Ruler for final approval.
Like Pensions and end of service benefits in UAE, you may also like to read about Employment Contracts in UAE.
Pension for GCC nationals
A GCC national employed in another GCC nation retains the entitlement to receive a pension similar to what they would receive if working in their own homeland. They are eligible for pension benefits as per the regulations of their home country. GCC nationals should enroll in the Insurance Protection Extension Program in collaboration with GPSSA.
