Pension Plans in UAE

With a growing focus on long-term financial well-being, pension plans UAE have become an essential part of employee benefits. The introduction of Federal Law No. 57 of 2023 has brought significant reforms to pension regulations, strengthening retirement security in the UAE. 

This article will share everything about the Federal Pensions Law as well as the best pension plans in UAE for both Emiratis and expats.

Best Pension Plans in UAE 

Here are the pension schemes in UAE that you should be familiar with —

Federal Pension Scheme

The UAE has taken a significant step toward enhancing retirement security with the introduction of Federal Law No. 57 of 2023. This law modernises the pension and social security framework, ensuring broader coverage and improved financial stability for employees. By setting clear guidelines on contributions, eligibility, and compliance, it positions the UAE as a leader in employee financial well-being.

Mandatory Registration for Emiratis

• All UAE nationals employed in public and private sectors (except in Abu Dhabi and Sharjah) must be registered with the General Pension and Social Security Authority (GPSSA) from their first month of employment
• Contributions provide pension benefits, end-of-service gratuity, and compensation in case of work-related disability or death
• Registration is mandatory under Federal Law No. 7 of 1999, as amended

Eligibility for this Pension Scheme in UAE

• The individual must be a UAE national working in the public or private sector
• No minimum age for government employees
• Private sector employees must be at least 18 years old and medically fit (as per a GPSSA-approved medical report)
• Minimum pension payout is AED 10,000 per month
• Emiratis can receive a pension upon reaching 60 years of age with at least 15 years of insured service

Abu Dhabi Retirement Pension and Benefit Fund (ADRPBF)

The ADRPBF provides retirement benefits for employees in Abu Dhabi, ensuring financial stability post-retirement. The emirate has its own pension legislation under Law No. 2 of 2000, which governs civil retirement pensions and benefits. This law ensures financial security for all citizens in both the public and private sectors, excluding retirees.

Mandatory Contributions

Both employees and employers must contribute to ADRPBF, with contributions based on the employee’s salary.

Key Provisions of the 2023 Law in Abu Dhabi

• Increased Maximum Pensionable Sum: Eligible employees can now receive 100% of their deductible salary after completing the required years of service
• Salary & Pension Combination: UAE nationals who have reached retirement age or completed the maximum service period can now combine their pension with a salary from a new job in both public and private sectors
• Standardised Pension Calculation: The pension amount is now determined based on the average deductible salary over the last 6 years of service, ensuring consistency across sectors
• Optional Contributions for Students & Working Mothers: Higher education students and female employees with children can voluntarily contribute to their retirement funds for added security
• Early Retirement for Women with Five or More Children: Eligible women can request early retirement benefits with a reduced service period
• Retirement Age & Service Requirements: The minimum retirement age is set at 55 years, with a minimum service period of 25 years
• Salary Cap for New Employees: For individuals entering the job market, the maximum deductible salary is capped at AED 100,000 in both public and private sectors

Pension Schemes for Expats in UAE

Unlike Emiratis, expatriates don’t have a mandatory pension scheme. However, they can rely on alternative retirement savings options in UAE like —

1. Golden Pension Plan

The Golden Pension Scheme, introduced by the UAE government through National Bonds (NBC), is designed to help expats build their retirement savings. 

This pension scheme UAE allows employees to contribute a portion of their earnings, including their end-of-service benefits, towards long-term financial security. It also supports employers in managing their financial commitments for employee gratuity. Additionally, employees can contribute extra from their basic salary to grow their savings further.

Key Features

• Sharia-compliant investment options
• Profit-sharing and bonus incentives
• Offers better returns compared to traditional gratuity
• Access to AED 36 million Rewards Program, including millionaire prizes
• Choose between lump sum or monthly contributions

Purpose of the Golden Pension Plan

• Encourages long-term savings and investment in UAE
• Supports expats in meeting financial requirements for a retirement visa
• Provides a secure way to build retirement funds over time

Who Can Join?

• Only employees of private companies that choose to offer this plan
• Employees can withdraw their savings anytime unless restricted by their employer

How Does it Work?

• Companies can set aside money for their employees, either as a lump sum or monthly deposits (including end-of-service benefits)
• The money is placed in a GPP account, where it earns profits and rewards
• While the company manages the funds, employees benefit from steady financial growth

Benefits for Companies

✅ Better end-of-service fund management
✅ Full control over contributions
✅ Flexible payment options (lump sum/monthly)
✅ High profit rates on savings
✅ Option to provide Life Takaful (Islamic insurance)
✅ No extra fees (admin/processing fees)

Benefits for Employees

✅ Easy monthly savings
✅ Earn high profits on savings
✅ See your end-of-service benefits grow
✅ Option to get Life Takaful
✅ Can sign up for other NBC products
✅ Safe, transparent, and capital-protected

2. Workplace Savings Plan (DEWS)

The DEWS Plan is a mandatory savings scheme for eligible expatriate employees in DIFC. Instead of a lump sum gratuity at the end of service, employers now make monthly contributions to a savings account for each employee. These contributions are invested, giving employees an opportunity to grow their savings over time.

Who can join?

• Expatriate employees in DIFC (mandatory)
• UAE & GCC nationals (not included, as they already have social security, but can join voluntarily)

Key Service Providers of DEWS

The DIFC appointed globally trusted firms to manage the plan:

• Equiom (Master Trustee): Holds contributions legally and ensures they benefit employees.
• Zurich (Plan Administrator): Provides day-to-day support through a call centre and DIFC team.
• Mercer (Investment Adviser): Guides investment decisions to safeguard and grow funds.

Employer Contribution Rules

Employer contributions are now linked to an employee’s monthly salary, instead of service years under ESG.

Investment & Fees:

• Contributions are invested in a range of funds, including Sharia-compliant options.
• Employees can monitor performance and choose investment strategies.
• 1.26% – 1.33% annual fees, depending on the selected investment fund. (Taken from the fund pricing, not deducted separately.)

Alternatives to Pension Plans in UAE

Aside from traditional pension pots, there are other ways to save or invest for your retirement. Here are three popular options for retirement savings in UAE —

1. Savings Accounts

A savings account helps you set aside money regularly and earn interest on your balance. By keeping a separate account for retirement, you can protect those funds and reduce the temptation to spend them early.

2. Investment Accounts

Unlike savings accounts, investment accounts let you put money into assets like stocks, ETFs, or mutual funds with the goal of higher long-term growth. Returns aren’t guaranteed but investments may generate dividends and capital gains that build wealth over time.

3. Property

Many people prefer investing in real estate for long-term security. Property can provide rental income during retirement and may also increase in value.

Frequently Asked Questions