The new UAE pension scheme for expats. A boon for employers and employees alike.

UAE pension scheme for expats

In the bustling business landscape of the United Arab Emirates (UAE), expatriates from around the world embark on a unique journey seeking professional growth, cultural enrichment, and financial security. Lucrative opportunities in this global economic hub draw individuals from various corners of the globe. But how does one achieve financial stability in such a dynamic business and work environment? The UAE pension scheme for expats might hold a few answers. 

The United Arab Emirates (UAE) holds one of the largest populations of expats in the world; 88.52% to be precise. Therefore, it is consequential for the nation to provide continuous stability for a population that contributes to building the economy. To address the long-term financial stability of such a large expat workforce, the nation has introduced a great pension scheme in UAE – the Golden Pension Scheme.

Traditional methods of retirement saving in UAE

Without the UAE golden pension, as expats in the UAE, you may have done retirement savings using other financial approaches. They include receiving mandatory End-of-Service Benefits (Gratuity) from employers, building personal savings and investments, venturing into real estate, focusing on educational savings, investing in health and life insurance, utilising private pension schemes and savings plans, and exploring alternative fixed investment vehicles such as gold or art. Undoubtedly, each method offers specific advantages and risks, and the choice usually hinges on an individual’s financial objectives, risk tolerance, and intended duration of stay in the UAE.

Pension Schemes in UAE

A pension scheme is an uncompromisable scheme for any expat in UAE. The most obvious reason to invest in the uae pension scheme for expats is for its straightforward, secure future. These schemes hold significant importance for expats in the UAE due to multiple reasons:

Financial Security:  As expats, you often move to the UAE for work opportunities and may not have access to your home country’s pension plans. Without social security benefits or retirement plans from home countries, a pension scheme in UAE becomes crucial for building a secure financial future.

Retirement Planning: For many expats, your time in the UAE might be temporary, and having a pension scheme helps you save and plan for your retirement years. It provides a structured way to accumulate funds and ensures a source of income post-retirement.

End-of-Service Benefits: The UAE mandates end-of-service benefits for employees, but you may need more than these funds for a comfortable retirement. A pension scheme offers an additional means to enhance your savings beyond the end-of-service gratuity.

Long-Term Savings: Pension schemes grow a savings culture by encouraging you to contribute regularly to a long-term financial plan. It instills financial discipline and aids in building a nest egg over time.

Employment Retention and Attraction: Pension schemes are a valuable way to attract long-term employees. As a company or employer, offering such schemes can attract and retain skilled expatriate workers, as these schemes present an added security and contribute to overall employee satisfaction.

Pension schemes in the UAE for expats are vital. They are your investments that are a structured and secure method for ensuring financial stability after your tenure in the country.

National Bonds and its Golden Pension Scheme:

National Bonds Corporation PJSC is a leading savings and investments company in the United Arab Emirates. It offers Sharia-compliant savings and investment opportunities to individuals and corporations. National Bonds aims to encourage a savings culture among the residents of the UAE by providing various savings products, including savings schemes, investment plans, and retirement schemes such as the UAE Golden Pension Scheme. It is 100% supported by the Investment Corporation of Dubai (ICD) and operates to help you save and plan for your financial future.

What is the Golden Pension Scheme?

The Golden Pension Scheme is a new pension scheme offered by the government through the NBC. It is an effort to create security for expatriates employed in the UAE. However, only some individuals can directly apply for the uae golden pension. The scheme was developed in response to the rising demand for financial security among employers and employees. Hence, this pension scheme in UAE aims to support corporates registered with National Bonds in facilitating your employees’ economic well-being and preparing them for retirement. In short, a company or corporation registered with NBC can apply for this scheme on behalf of your employees.

So, if you are a company interested in registering with NBC for the golden pension scheme or if you are an expat looking to work in a company that will assist you in availing the pension initiative, the scheme has some exciting benefits:

Advantages of uae pension scheme for expats for the Company

The Golden Pension scheme is designed to assist companies in retaining employees while enabling them to strategise and prepare for end-of-service financial responsibilities, steering away from immediate payouts from their operational funds.

• Innovative EOSB placements

• Oversight and access to staff product accounts

• Control over contributions and a tool for staff retention

• Boosted morale among employees

• Flexibility in lump-sum and monthly deposits

• Attractive profit rates for employee contributions

• Participation in NBC’s AED 35 million Rewards Program (Employees can benefit from a grand prize of AED 1 million for two winners each every three months and over 423,000 in prizes per year)

• Option for employee enrolment in Life Takaful insurance policy

• No SF/admin/processing fees and Sharia compliance

Benefits for Employees

Employees seeking straightforward and low-risk investment opportunities will benefit most from the UAE’s Golden Pension Scheme. The Golden Pension Scheme aims to encourage you as expatriates to invest your end-of-service benefits into a pension scheme in UAE, helping you build your savings. Some of the other benefits are:

• Affordable monthly contributions

• Competitive profit rates

• Transparency on EOSB amount, profits, and winnings

• Eligibility for NBC’s AED 35 million Rewards Program

• Opportunities to win significant prizes

• Access to Life Takaful insurance policy

• Option to sign up for additional NBC products for added benefits

• Sharia-compliant and capital protection

• Clarity on profit calculation and holdings

Golden Pension Scheme and Retirement Visa in the UAE

Apart from the Golden Pension Scheme, the UAE offers a retirement visa scheme that allows you to retire if you meet specific criteria based on age and financial stability. Qualifying options include stable monthly income, savings, property investment, or a combination of income and savings. In the UAE, the General Directorate of Residency and Foreign Affairs (GDRFA) offers retirement visas. Individuals interested in obtaining a retirement visa must apply through this governmental department. 

Is the retirement visa required to avail of the Golden Pension Scheme?

A retirement visa is not a prerequisite for the Golden Pension Scheme. The Golden Pension Scheme is designed as a voluntary savings initiative for expatriates working in the UAE. It aims to encourage long-term savings and planning for retirement by allowing you to invest your end-of-service benefits into a pension, thereby building a financial safety net for your future. 

The retirement visa, on the other hand, is a separate initiative offered to individuals who wish to retire in the UAE and meet specific criteria related to age and financial stability. It’s not directly linked to the Golden Pension Scheme. While the retirement visa and the Golden Pension Scheme aim to enhance financial security, the latter is a savings program precisely customised for employees, allowing you to contribute to your retirement fund without needing a retirement visa.

Contributions to the Scheme

  • • The Investment Corporation of Dubai introduced the Golden Pension Scheme to allow you as employees to invest a portion of end-of-service benefits through National Bonds. 
  • As Employers, you can contribute a lump sum or part of your employees’ benefits to this pension scheme. 
  • Employees can make voluntary monthly contributions of as little as AED 100. 
  • The Golden Pension Scheme, managed by National Bonds, provides a cost-effective solution for companies to offer financial benefits to employees. 
  • It allows for customisable options and flexibility in contributing to the plan, with the company having control over the fund while employees receive applicable profits and rewards.

Everybody deserves a happy retirement. In a region where financial planning for retirement among expatriates has traditionally been challenging, the UAE pension scheme for expats a.k.a the golden pension scheme is a progressive initiative. It strives to provide long-term financial security and stability for employees such as you, ensuring your hard-earned benefits can contribute to future economic well-being.

Bad financial decisions can turn into the most vulnerable situations if you have incomplete information. It is best to consult experts to provide the best, holistic guidance and choose a financial plan that will be most suitable for you. We, with our business knowledge spanning over a decade in the UAE, will help you in your journey. Know that Nair and Nelliyatt are here to help when you require financial or tax consultancy.

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