UAE has announced a Golden Pension Plan for its expat employees for the first time. It is a voluntary saving measure that is not compulsory for employees. But if they want to save in the long run without any risk factors, this is a great option for them!
If the company allows, an employee can avail of a part of this amount before retirement.
Is It Mandatory For UAE Expats To Contribute To A Golden Pension Each Month?
This scheme is for the employees but is targeting the employers. They get an option to either pay small monthly installments in the pension account or put in a lump sum amount. Employees can also put some amount of their earnings here (starting from Dh100 per month).
The company cannot decide on behalf of the employee how much money should be saved. These funds are collected and managed by the National Bonds, Sharia.
The CEO of National Bonds; Mohammed Qasim Al Ali has said that after the funds have been collected, National Bond will issue savings bonds, Sukuks. These will be put under the employee’s name and will be according to the company’s allocation. Sukuk would be locked till the time of redemption and will only be initiated if the company requests it.
So, when a UAE expat signs up for this Golden Pension Scheme, he enjoys savings that are contributed by the organization. It helps the employee in the long run as he would have a large sum of investment after retirement.
Although, if any employee is in the need of funds, he can easily access them. In this case, time is not a constraint.
CEO Mohammed has also said that as a step towards a safer future, employees can also include the employer’s gratuity investment. This is not compulsory but it can benefit them.
He has also announced that after every three months, two Golden Pension Plan owners will receive Dh1 million as a prize. Every year, prizes, cars, and vouchers worth Dh423,000 would also be given to regular savers, women, and minors. This is decided as an act of encouragement for the employees to register under the plan.
The scheme is available for both private and public sector employees and there are no restrictions, whatsoever. The plan is to help employees save for their future.
It is initiated because the UAE population is filled with expats and they all used to rely on gratuity for their retirement. To stabilize their income, the Golden Pension Plan is introduced.
National Bonds has signed up with more than 8,000 private companies for this pension plan.
Mohammed Qasim Al Ali has cleared the air around this scheme. He has said that this plan is not a replacement for gratuity but an addition to it. The CEO has ensured employees that the National Bonds will manage all the funds by investing them into low to medium-risk Sharia assets. The approach is to generate investments within the region. The company seems pretty confident about navigating the future as well.
One more thing that they can be sure about is that various companies will look at increasing the employee satisfaction rate. These kinds of policies also instill a sense of confidence and support in the employees. They feel that the country is with them and is helping improve their financial status in the long run.
The entire amount can be redeemed once the employee retires or quits the job. Although he can get small funds from the pension plan. This must be consented to by the company and not solely by the employee. If you are an expat UAE employee, this scheme is for you!