DIFC launches a workplace savings scheme to ensure end-of-service benefit security
Many expats have long desired a pension scheme similar to the one practised in many countries around the world. UAE’s solution to this was the end of service benefits which only kicked in after an employee has completed a year of service. However, there have been cases where companies haven’t been able to pay final benefits nor salaries to employees, making many vary of the amount they are expecting to receive.
As companies the world over have been introducing more forward-thinking employee benefits, such as the most recent one from Zomato offering both parents 6 months parental leave, DIFC has announced its DIFC Employee Workplace Savings (DEWS) scheme, set to launch from January 2020 onwards to address the risk involved.
As per the statement issued, the new scheme “will see the evolution of end-of-service benefits within the Centre from a defined benefit structure to a funded and professionally managed defined contribution plan.”
It will offer an “investment platform for receiving and managing mandatory employer end-of-service contributions on behalf of their employees and any added voluntary savings by employees, including cash or cash equivalent options for those members that do not want to take investment risk with their contributions.”
DIFC conducted thorough research to finalise which service providers will be managing the DEWS scheme. It has announced that Equiom — a global trust services provider — will “act as master trustee of the DEWS plan,” whilst Zurich Middle East will be the “scheme administrator.” Mercer will assist Zurich as an investment adviser, whilst Smart Pension will provide technology services.
It was critical for us that the partners selected to manage the DEWS scheme demonstrated outstanding capabilities, a well-tested track record and alignment with international best practices. Based on the extensive experience and sterling reputation of the selected service providers, having implemented and participated in similar schemes in a number of other jurisdictions, also in the region, we are confident that their collective expertise of over 70 years in this field will help secure better employee end-of-service benefits for the DIFC workforce.”Arif Amiri, Chief Executive Officer, DIFC Authority
DEWS will be introduced as a mandatory plan to ensure DIFC workforce receives its dues. The plan according to Sheila Dean Global Chief Executive Officer of Equiom, “will not only secure accrued benefits but provide a platform to enable growth and a longer term outlook.” They will soon startup on-boarding employers based in the DIFC.
A DEWS Supervisory Board will soon be set up to overlook the workings of the scheme as well as decide on the rules and settle issues. The Board will consist of representatives of DIFC, employers and well as employees.
An immense leap forward, the scheme will ensure the employees in DIFC will have benefit security that is not dependent upon their employer’s ability to pay; thereby removing the risk of not receiving the benefits should the employer go out of business. In addition, employees will also have the option to earn a return on the amount contributed by them as well as the employers towards their savings under this scheme.