UAE Introduces First Investment Funds For End-of-Service Benefits

The Ministry of Human Resources and Emiratisation (MoHRE) and the Securities and Commodities Authority (SCA) have authorised Lunate and Daman Investments to operate under the Voluntary Alternative End-of-Service Benefits Scheme (Savings Scheme). This approval allows these companies to launch savings funds for end-of-service benefits, ensuring capital protection and compliance with Islamic Sharia.

The Savings Scheme aims to invest financial sums allocated for end-of-service benefits for private sector workers in accredited investment funds. This initiative seeks to grow workers’ savings, allowing them to benefit from returns on their investments. Consequently, it strengthens both employers’ and employees’ economic impact, supporting the UAE’s economic ecosystem.

Companies interested in registering their employees in the Savings Scheme can contact Lunate through its website, by calling 026927213, or via email at [email protected]. Daman Investments can be reached through its website at www.daman.ae, call centre at 046109666 or via email at [email protected]. MoHRE has also created a dedicated page on its website with details about all authorised savings funds and registration processes.

The joint committee, comprising representatives from MoHRE and SCA, approved the applications of Lunate and Daman Investments after ensuring compliance with all regulatory requirements. The companies must adhere to a strict set of standards and obligations while signing agreements with employers and accepting voluntary subscriptions.

The statement from MoHRE and SCA highlighted that "Lunate and Daman Investments have been granted final approval to launch the End-of-Service Programme for workers in the UAE, in recognition of their role as leading financial institutions with an impeccable reputation and extensive experience in managing investment funds." This approval enhances efficiency in implementing the Savings Scheme, offering notable benefits for workers.

Implementation Mechanism

The joint committee has established a specific process to expedite the implementation of the Voluntary Alternative End-of-Service Benefits Scheme. Companies must submit their applications, obtain preliminary approval from MoHRE, and then proceed with obtaining the final licence from SCA. They must include necessary documents and meet conditions for establishing end-of-service benefits investment funds.

The statement further explained that "the Committee sought to ensure applicants’ preparedness, financial capacity, and experience before approving them for the Savings Scheme." This approach enhances efficiency in implementing the scheme while highlighting its sustainable economic impact on service providers.

Benefits for Employers and Employees

The Savings System ensures that workers benefit from investing their end-of-service gratuity by generating additional financial gains through safe investments. This helps guarantee their rights and ensures stability for their families. The scheme supports activities that enhance business ease while attracting and retaining talent.

Employers can focus on business development instead of managing end-of-service benefits administration. This boosts employee loyalty, satisfaction rates, and productivity by safeguarding their interests and financial entitlements. The robust infrastructure of investment funds manages workers’ end-of-service entitlements effectively.

In a joint statement issued today, MoHRE invites all private-sector companies to avail themselves of the benefits offered by the Savings Scheme. The scheme leverages licensed service providers' infrastructure to manage workers' end-of-service entitlements efficiently.

With inputs from WAM