MoHRE Urges Employers to Adopt Voluntary ‘Savings Scheme’ for End-of-Service Benefits
The Ministry of Human Resources and Emiratisation (MoHRE) has called on private sector employers to register for the voluntary ‘Savings Scheme,’ an alternative system to the traditional end-of-service benefits. This initiative aims to simplify the management of financial entitlements while improving the ease of doing business across the UAE.
MoHRE emphasized that the scheme enhances the ability of private sector companies to attract and retain talent by protecting workers’ financial rights and offering opportunities to grow savings through investment returns supported by accredited investment funds. These funds, approved by MoHRE and the Securities and Commodities Authority (SCA), comply with the highest standards for establishing and managing savings programs.
In an official statement, the Ministry encouraged private sector companies to adopt the system, highlighting its potential to improve employee well-being, increase corporate competitiveness, and strengthen the reputation of businesses in the UAE labor market. Employers who participate in the scheme position themselves as workplaces that prioritize financial security and professional growth for employees, which fosters loyalty and boosts productivity.
The Savings Scheme is also a cost-effective approach to managing financial obligations for employers. Contributions are calculated based on the employee’s basic salary at the time of payment, which is generally lower than the salary at the end of service under the traditional gratuity system. This reduces long-term costs while ensuring financial security for workers.
Employers can join the scheme by applying through MoHRE’s service channels, selecting an accredited investment fund, and paying the subscription fees for employees they wish to enroll. Workers will retain the gratuity they earned prior to joining the scheme, while future entitlements will be calculated under the new system from the date of registration. At the end of their employment contract, employees will receive their total accumulated benefits from both the previous and current systems.
The scheme also allows workers to make additional contributions of up to 25% of their annual salary to increase savings and investment returns. Employees have the flexibility to withdraw these contributions and returns based on the terms and conditions of the system. When changing employers, workers may transfer their accrued savings to a new fund or keep them invested in the existing fund. New employers can also choose to contribute to the same fund or register the employee with a different fund manager.
Skilled workers enrolled in the scheme can select investment options aligned with their preferences, while unskilled workers are enrolled in the secure Capital Guarantee Portfolio. Additional categories, such as freelancers, self-employed individuals, and non-citizen government employees, can also voluntarily participate in the scheme through personal contributions. Emiratis employed in both the public and private sectors may join voluntarily, while employers remain responsible for their contributions to pension and social security systems.
The Ministry provides detailed and regularly updated information on its website, www.mohre.gov.ae, about the accredited investment funds and the benefits of the voluntary alternative end-of-service system. MoHRE continues to encourage businesses and workers to take advantage of this scheme to ensure financial security and stability for all parties involved.