MoHRE Launches 'Savings Scheme' to Improve Worker Benefits, UAE Business

The Ministry of Human Resources and Emiratisation (MoHRE) has introduced a new initiative aimed at enhancing the financial security of private-sector employees, as well as improving the UAE’s overall business environment. The "Savings Scheme" offers an alternative to the traditional end-of-service gratuities that workers typically receive when they leave their jobs. This initiative, which is voluntary, allows employees to accumulate savings in secure investment funds that can potentially offer returns beyond the standard gratuity.

In collaboration with the Securities and Commodities Authority (SCA), MoHRE launched the scheme to address two key objectives: boosting ease of doing business in the UAE and strengthening the financial wellbeing of employees. The new system allows employees to grow their end-of-service benefits by participating in a more dynamic and secure investment structure, offering better opportunities for financial growth. The Savings Scheme provides employees with greater control over their entitlements, giving them the flexibility to make additional contributions of up to 25% of their annual salary. Workers can also withdraw their contributions and returns based on specific terms and conditions.

For businesses, the scheme offers potential cost savings compared to traditional gratuity payments. One of the key advantages is that the contributions to the scheme are calculated based on an employee's current basic salary rather than their final salary, which can lead to more manageable financial obligations for companies in the medium term. This model not only helps companies reduce long-term costs but also positions them as attractive employers, capable of offering more modern and flexible benefits that prioritize the welfare of their workforce.

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The scheme also opens up opportunities for freelancers, self-employed individuals, and non-citizen employees working in government-linked organizations to participate. Furthermore, Emirati workers have the option to contribute voluntarily to the scheme, with the government and social security authorities still covering their end-of-service payments.

MoHRE has encouraged private-sector companies to adopt this new system as a step toward improving their employee benefits package and contributing to a healthier and more sustainable business environment in the UAE. For further details on how to participate in the scheme, companies and workers can visit MoHRE’s official website, where they can access information on the scheme’s investment options and a list of accredited funds.

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