MoHRE Urges Employers To Register For Voluntary Savings Scheme To Enhance Employee Wellbeing

The Ministry of Human Resources and Emiratisation (MoHRE) has emphasised the success of the voluntary 'Savings Scheme'. This alternative end-of-service benefits system is designed for private-sector employees. It aims to improve business operations by attracting and retaining talent while safeguarding workers' financial rights. The scheme also offers opportunities for employees to grow their savings through investments in accredited funds.

MoHRE, in collaboration with the Securities and Commodities Authority (SCA), has approved several investment funds for this scheme. These funds have been vetted to ensure they meet the required standards for managing savings effectively. The Ministry encourages UAE private sector companies to join the Savings Scheme, which can enhance employee wellbeing and corporate reputation in a competitive market.

Participating in the Savings Scheme allows companies to position themselves as attractive workplaces that prioritise employees' financial growth and security. This approach fosters loyalty among staff and helps attract top talent. Additionally, it boosts productivity by enabling employees to grow their financial assets through secure investment opportunities.

The scheme provides a proactive way to manage financial obligations, promoting long-term financial health for companies. Employers benefit from lower medium-term costs compared to traditional end-of-service gratuities, as contributions are based on current basic salaries rather than those at service termination.

Companies interested in joining can apply via MoHRE's service channels. They must select an accredited investment fund and pay subscription fees for enrolled employees. Workers retain any gratuity earned before joining the scheme, with previous systems suspended upon registration in the new system.

The calculation of gratuity under the new system begins from the registration date, with all earnings disbursed at contract end. Employees can make additional contributions up to 25% of their annual salary and withdraw contributions based on system terms.

Flexibility for Workers

If an employee changes jobs, they can withdraw or retain their accrued amount in the fund. The new employer may continue contributions or register them with another fund manager. Skilled workers have various investment options, while unskilled workers are limited to the Capital Guarantee Portfolio.

The scheme also offers optional participation for other categories like self-employed individuals, freelancers, non-citizen government employees, and Emiratis in both sectors. They can register through voluntary contributions only, ensuring their savings are protected and grown as an end-of-service gratuity.

Additional Information

MoHRE provides detailed information about accredited investment funds on its website www.mohre.gov.ae. This includes updates on the voluntary alternative end-of-service benefits system 'Savings Scheme' for private sector workers.

This initiative reflects a commitment to enhancing employee welfare while supporting businesses in maintaining a competitive edge within the UAE's dynamic labour market.

With inputs from WAM