Termination payment - on termination of employment, employees are generally entitled to a severance payment called an end of service gratuity. This is accepted to replace the employer’s obligation to provide access (and contribute to) a pension plan.
State Plan - UAE and GCC national employees must be registered with the General Pensions and Social Security Authority (GPSSA), who maintain a State pension benefit. Employers must make contributions to the GPSSA on behalf of employees. Failure to register employees and / or failure to pay the mandatory contributions will result in fines being levied against the employer.
Additional Pensions - while some employers do offer access to additional pension plans, it is not common. Under the new labor law which came into force in February 2022, there is scope for the authorities to introduce alternative systems in place of the end of service gratuity regime. However, at present no alternatives have been introduced. Accordingly, under the new labor law, any pension plan would be additional to the end of service gratuity entitlement.
The situation differs in the Dubai International Financial Centre (DIFC). In the DIFC, the end of service gratuity obligation was recently replaced by a mandatory employee savings scheme (the "DEWS"). The DEWS system requires employers to make contributions on the employee's behalf on an annual basis at rates of either 5.83% (employees with more than one year but less than three years of continuous service) or 8.33% (employees with five or more years of continuous service) of the employee's salary per year. It is expected that a scheme similar to DEWS will eventually be rolled out across the UAE to replace the current end of service gratuity regime.