Private Pension Funds & Private Social Security Services
Overview (Dubai residents' social security and pensions)
- Beginning in the first month of employment, public and private organizations in the UAE are required to register their Emirati staff members with the General Pension and Social Security Authority (GPSSA). For qualified GCC nationalities and Emiratis employed in the UAE, pensions are offered. Examine the terms and circumstances regarding the employer’s pension fund contribution, eligibility, age restrictions, and the number of years of service required.
- We would like to bring to your notice the passing of Law No. 57 of 2023, which deals with security and pensions:
- Starting on October 31, 2023, the law will be applicable to Emirati workers who start working for the first time with organizations that have registered with the GPSSA.
- Since they will still be covered by the requirements of the current law, 7 of 1999, insured employees and retired pensioners who worked before October 31, 2023, are not subject to the provisions of the new law.
- Organizations in the public and private sectors must keep making contributions and carrying out their duties in line with the established protocols and to the same extent.
Registration Requirements for Emiratis
- From the first month of work, all public and private organizations in the United Arab Emirates are required to register their Emirati staff members with the General Pension and Social Security Authority (GPSSA).
- Under the provisions of Federal Law No. 7 of 1999 on pensions and social security, as amended, registration of UAE nationals working in the government and private sectors and contributing to their pension is mandatory. Regular and timely contributions result in pension and retirement benefits, end-of-service gratuity, and compensation in case of a work-related disability or death.
The Pension Law's Scope
Employers in the government sector, such as the federal government, municipal governments (apart from Abu Dhabi and Sharjah), public corporations, and banks connected to the federal government, are subject to the pension law in the United Arab Emirates. Employers in the private sector in all emirates but Abu Dhabi are likewise covered by the law.
Important Clauses of the 2023 Law include
- Raising the maximum pensionable pay from 50,000 (fifty thousand) to 70,000 (seventy thousand) AED per month for UAE residents employed in the private sector
- Determining pensions for the public and commercial sectors based on the average monthly pensionable pay for the previous six years of service
- Seven cases where the insured was qualified for a retirement benefit
- A woman who is insured, regardless of her marital status, may apply for a retirement pension; if she is a mother of five or more children, the minimum age and subscription term may be lowered.
- Determining that in order for an insured person to be eligible for retirement benefits, they must be at least 55 years old and have paid in full for 30 years.
- If a retiree from the public or private sector reaches the 30-year mark in their subscription period, they are eligible to combine their pension with the income from a new employment.
- The insured person must contribute $26% of their pensionable wage each month. Eleven percent goes to the insured worker, and fifteen percent goes to the employer. If an insured citizen’s pensionable salary is less than AED 20,000 and they work in the private sector, the government pays 2.5 percent on the employer’s behalf. The government’s project aims to encourage UAE citizens to work in the private sector.
- Under the terms and conditions established by GPSSA, an insured employee may continue to contribute to the pension during an unpaid leave of absence for the purpose of pursuing postgraduate education or taking care of her children.
Pension Eligibility
If an Emirati national fulfils the requirements of an insured service duration of 15 years and reaches retirement age of 60, they are eligible for a pension.
Pension for Early Retirement
A national of Emirati may be qualified for an early retirement benefit if:
- An insured man completes 20 years of insured service when he is 55.
- A woman who has been insured turns 50 and has served for 20 years.