UAE – DIFC: New mandatory savings plan
Monday, 01 20 2020, Category: Economy, Country: U.A.E
The Dubai International Financial Centre (DIFC) is introducing a new mandatory Employee Workplace Savings (DEWS) plan that will replace the current end-of-service benefit (EOSB) regime for foreign workers for future service. The most important change will be the switch from the current (predominantly) unfunded defined benefit (DB) regime to a funded defined contribution (DC) regime, the first of its kind in the Gulf Cooperation Council (GCC) region. Originally announced to go live in January 2020, the launch date has been delayed one month, with a grace period ending March 31, 2020, for employers to enroll covered staff and commence contributions.
Companies will have the option to offer a Qualifying Alternative Scheme (QAS) as an alternative to DEWS for funding the EOSB by applying for and obtaining permission from the DIFC Authority. Given the short time frames to set up a new QAS or adapt existing plans to be a QAS, then gain DIFC Authority approval — all by March 31, 2020 — most DIFC-based organizations will likely need to default into DEWS.
Source: Willis Towers Watson