Gulf News (United Arab Emirates), 17 November 2023: Abu Dhabi’s Pension Fund has announced it has amended the Emirate’s Retirement Law.
Among other things, the maximum pensionable amount has been increased to 100% of the deductible salary after the maximum number of years’ service have been completed.
Insured citizens will receive a retirement pension equivalent to 80% of their salary, subject to deduction, after they have completed 25 years of service.
After they have completed 25 years of service, they will have the option to increase this percentage by an additional 2% per year up to 100% of the deductible salary.
Previously, the maximum pensionable sum of deductible salary was 80%, even after individuals had reached the maximum number of years’ service.
The Law has been amended to ensure equality for all UAE nationals working in the public and private sectors by standardising the pension calculation process for all those who are currently insured and those who have recently been employed.
It will be calculated based on the average deductible salary for the last six years of service.
The changes aim to maintain a competitive and sustainable retirement system that ensures equality between public and private sector employees.
The amended law applies to all citizens who are currently insured and does not affect their existing rights. Insured citizens retain the right to calculate their pensions based on the service periods applicable under the previous system. This also applies to other insurance benefits available to insured citizens under the previous system.
In addition, the maximum deductible salary is now set at 100,000 AED for those entering the job market.
The percentage of monthly retirement contributions remains 26% of deductible salary.
Employees who are newly insured will have to contribute 11% of the contribution and employers will have to contribute 15%.
The deduction percentages of those currently insured are not affected.
The minimum retirement age has been set at 45, provided 25 years of service have been completed. This retirement age will now gradually increase at a rate of six months every year until it reaches the new minimum retirement age of 55.
Under the amendments, there are special provisions for female employees with children. They are offered early retirement benefits.
Female employees with children who want to temporarily leave work because of family commitments will also have the option to continue receiving retirement contributions from the Fund during their leave period, to ensure continued retirement benefits.
The same benefit is available to insured citizens who want to continue their higher education, in line with the guidelines under the Law.
Insured citizens can access a combination of their retirement pension and salary after completing the maximum number of years’ service or on reaching the retirement age specified by law.
The aim is to enable UAE employees to continue contributing to various aspects of the national economy for longer.
Insured individuals who meet the retirement criteria under the previous retirement system will remain eligible for retirement under the new retirement system. They will be given the option to continue working to take advantage of the new benefits provided by the amended scheme.
Also reported in Emaratalyoum on 17 November 2023. For the full story, click here.
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