Dubai Government unveils action plan for foreign employees' savings scheme

A road map is being drawn up for implementing the newly announced savings scheme for foreign employees of Dubai government entities.

The Steering Committee tasked with overseeing the system said non-Emirati workers will be enrolled in the scheme in phases.

Abdulla Al Basti, Secretary-General of The Executive Council of Dubai and Chairman of the Committee, said the initiative will play a key role in enhancing the economic and social stability that Dubai offers its employees.

"With the scheme in place, Dubai will continue to be an attractive career destination that appeals to outstanding talent and a preferred destination for personal and professional stability," he explained.

It will protect the rights of employees by providing them with opportunities to invest or protect their end-of-service benefits.

The scheme provides several investment options with varying returns and risks, including Shariah-compliant portfolios.

Enrolment and Contributions

Under the supervision of the DIFC, the board of trustees and international investment institutions will apply global best practices to ensure the efficiency and effectiveness of the scheme.

Joining the scheme will be by default for foreign employees working in government entities, subject to Law No. (8) of 2018 in relation to the management of human resources for the Government of Dubai, according to job grades and over successive time periods.

The employer and the Department of Finance will lead this.

The employer will contribute the total end of service gratuity to the scheme, starting from the date of joining the scheme, without including the financial dues for previous years of service to which current legislation applies.

The percentage of the contribution to the scheme will equal the end of service benefits due to the employee, in accordance with Human Resources legislation. In the event that the employee is promoted or has changed his role, a change in contributions will become effective.

The rate of return will depend on the amount invested by the employee, how it is distributed across available investment portfolios, and the risks associated with it.

Employee participation in the scheme will stop upon the end of their service. At this point, employees have the right to withdraw their entire end of service gratuity amount, or can choose to remain in the scheme, should they desire to.

In addition to the end of service gratuity that the employer is mandated to pay, the employee can make personal contributions to the scheme if desired and has the right to add or withdraw any personal savings from the scheme at any time.

Investment Portfolios

The Steering Committee clarified that the scheme would provide several investment portfolios with varying returns and risks, as well as Islamic Shariah compliant portfolios.

All employees will be enrolled by default in the capital protection portfolio, at which point they have the right to choose their preferred investment portfolio approach.

The employee can deposit all savings in one investment portfolio and also has the option to choose several investment portfolios at the same time.

For example, employee A can deposit (100%) of the savings in a medium-risk portfolio, while employee B can choose to deposit (30%) in a high-risk portfolio, (30%) in a medium-risk portfolio, and (40%) in a low-risk or capital protection portfolio.

Roadmap

The Steering Committee is currently working on developing a roadmap that will enrol Dubai government employees in phases to ensure the establishment of an integrated and sustainable system that protects employees’ rights.

Further details will be communicated in the next stages of the plan.

The Steering Committee of the ‘Savings Scheme for Foreign Employees in the Government of Dubai’ announces its enrolment and implementation mechanism. pic.twitter.com/Naa2DRma9k

— Dubai Media Office (@DXBMediaOffice) March 15, 2022