Secure Your Golden Years: In-depth Look at Pension Schemes

July 9, 2024

In this webinar, Sharifa Mohamed Al Balooshi who is the Customer Happiness Department Head at the General Pension and Social Security Authority (GPSSA), explains the pension schemes GPSSA affiliated with.

Here are some of the questions that were answered during the webinar:

What is the pension scheme?

UAE-based insured Emiratis are entitled to receive a pension amount once they end their employment service or decide to retire, given that they have registered and contributed on monthly basis with the GPSSA, from the first month they are employed.

The pension scheme offered by the GPSSA covers work, ageing, disability, decease and occupational illnesses.

How can companies encourage Emiratis to be part of it?

Government, federal and private sector entities in the UAE must ensure their Emirati employees are registered with the GPSSA the moment they are employed. They must also ensure that the GPSSA receive their monthly contributions from the beginning of each month, with a maximum grace period of 15 days, i.e. from the 1st to the 15th day of the month.

This timely and proficient contribution process ensures that insured Emiratis receive their pension and retirement benefits, end-of-service gratuity’s and/or compensation amounts in case of a work-related disability, injury or decease.

Are we seeing something similar to expats on the horizon?

Pension is only available to eligible Emiratis and GCC nationals working in the UAE.

Are there different types of pension plans, what are they?

Pension is calculated in accordance to the average contribution account salary based on the years of service, which is why it is extremely important for entities and their insured Emiratis to be aware of the method (how, when and why) by which contribution salaries are calculated, since this is what determines the pension account salary amount or end-of-service gratuity.

Does the employer have a role in managing the Emirati’s pension plan?

Employers are in charge of managing the registration and monthly contribution transactions for their Emirati employees from the moment they are employed in their entity. Employers must take the time to explain the pension and social security provisions to insured individuals. In order to do so, they need to be aware of the exact contribution amounts required from themselves and their employees, and be able to explain the pension calculation method in full detail.

Will the employer calculate the pension fund?

The pension fund is calculated by the GPSSA, but as mentioned earlier, employers are responsible in explaining the contribution calculation method by which pension is calculated and paid once an insured is ready to retire.

It is important for both employers and employees to understand GPSSA’s contribution method, i.e. when and how contributions are calculated and their affiliated percentages.

If an Emirati loses their job, can they start withdrawing from their pension?

Under normal circumstances, pension is paid to insured individuals once they retire, provided they have spent 15 or more years working. If the insured has not worked for that long, he/she becomes entitled to receiving an end-of-service gratuity instead. That is why the GPSSA continues to encourage Emiratis to work past 15 years in order to receive fixed pension amounts that may sustain and benefit an entire family.

There are several situations whereby pension is disbursed before its time. Those include:

  • Termination of service
  • Decease of an insured individual
  • Total disability or health-related issues that occur due to, or during working hours (in which case pension is disbursed to the pensioner if still alive, or to their heirs (known as beneficiaries), given that the medical situation has been approved by an official medical committee

Additionally, working mothers are offered different conditions regarding minimum contribution years and the pension entitlement age, with a reduction of two years in the contribution period (28 employment years) and three years less in age (52 years) for each of the 5th and 6th child; 3.5 years for the contribution period (26.5 years of employment service), and four years for a 51-year-old female or a mother with a 7th child.

What exactly is NAFIS and how can employees and employers take advantage of it?

As part of the NAFIS program, the GPSSA has partnered with the Human Resources and Emiratisation (MoHRE) to support Emiratis currently employed in the private sector, as well as jobseekers, by having the UAE government bear 2.5% of the contributions for private sector Emirati employees.

This federal program aims to increase and empower Emiratis occupying jobs in the private sector across the UAE over the next five years.

GPSSA responses post-webinar

During the webinar, attendees were given the opportunity to ask questions for GPSSA, below are the responses.

Is this only for JAFA registered companies?

Federal Law No. (7) of 1999 on Pension and Social Security as well as Federal Law no. (57) of 2023 on Pension and Social Security cover federal, government and private sector entities across the UAE, including:

  • The local government authorities including the governments of Dubai, Ajman, Ras Al Khaimah, Umm Al Quwain and Fujairah. The government sector includes ministries, public cooperation’s, authorities, companies and entities by which the federal government owns shares
  • The private sector includes a natural or juridical person (sole proprietorship, office, company) employing Emiratis where the federal government is not a shareholder
Hi. You’ve made significant improvements to the registration process. Are there plans to enhance the de-registration process? Currently, we can’t register an employee if they’re still registered with their previous employer. Additionally, can we streamline the monthly payment process with UAEFTS to adopt a more structured format like the WPS file format?

  • It’s great to hear that you’ve noticed the improvements in the registration process, which we continue to upgrade in order to meet our customer expectations
  • Regarding the de-registration process, enhancing it is definitely on our radar. We understand the current limitations when an employee is still registered with their previous employer, and we’re working on solutions to streamline this process effectively
  • Regarding streamlining the monthly payment process with UAEFTS and adopting a more structured format like the WPS file format, we are actively considering enhancements to streamline payment processes in our upcoming new platform. This aligns with feedback we’ve received from various forums and reflects our commitment to improving user experience and efficiency
Is there also a plan to introduce a feature on the website that allows employers to view all payments made per insured employee for reconciliation purposes?

Yes, we are pleased to inform you that one of the new features in our upcoming pension platform includes a feature on the website that allows employers to view all payments made per insured employee for reconciliation purposes. This feature provides enhanced transparency and facilitates efficient reconciliation processes for employers.

Is there any way we can get the formula on how you are calculating Nafis Rebate for our understanding on the paid rebate to our company?

To provide you with accurate information, we recommend visiting the official Nafis platform or contacting their support team directly. This falls outside of GPSSA’s scope, and they would be best equipped to assist you with details on how the rebate is calculated and any related queries.

As an employer, are we able to modify the information provided for an insured before their application is rejected? We found that for some cases while we could access pending cases before it being rejected, making any changes was not possible. Thank you.

As an employer, you can modify the information provided for an insured before their application is rejected if there are deficiencies in the documents only.  However, applications are rejected immediately if the entered data, such as name, date of hiring, or summary data, is incorrect.

How can we update the salary of employees?

  • Government sector: You can update the salary at any time during the year when paying the monthly contributions at the variable value
  • Private sector: Salary updates should be done once a year, specifically in January of each year. When making the payment through the bank, please select the “Adjustment payment” option
How can we offboard an Employee who resigns, GCC national (Saudi)?

Send an email to GCC UAE via: [email protected] with the required documents to be able to receive the end-of-service gratuity

Is there any Nafis Rebate webinar to explain on the rebate payment calculation to the company to get clear understanding on the rebate payment?

To provide you with accurate information, we recommend visiting the official Nafis platform or contacting their support team directly. This falls outside of GPSSA’s scope, and they would be best equipped to assist you with details on how the rebate is calculated and any related queries.

Hi Madam Sharifa, would like to ask if there is a plan for the implementation on the portal for Pension Contribution Invoice. We would appreciate it if we can download the pension contribution invoice every month?
  •  Currently, it is not possible to download the pension contribution invoices through the website. However, we have plans to implement a feature in the new platform where you can download the invoices every month
  • For any immediate assistance with pension contribution invoices, please contact us at [email protected]
Hello, May I ask if the company should pay GCC National employees’ gratuity or it will be via GPSSA?

The company will only pay the monthly contributions. Gratuity will be disbursed by the  GCC pension authorities in accordance with their calculation laws.

Please I need more info about registering decree holders

Only employees who possess both a passport and a family book can be registered as per the provisions of the law

Hi, is the timeline to register UAE National under GPSSA 1 month or 2 months from the date of their MOHRE contract?
Within one month
What if the previous employer did not cancel the subscription, and the current employer is not able to register the UAE national under their organization?
You can start paying the monthly contributions using the insured person’s Emirates ID number to avoid monthly penalties. Regarding registration, the registration team can be reached via: [email protected]

They can assist you in temporarily closing the previous file so that you can proceed in the registration process

What is the GPSSA requirement for Private Company Registration of National and GCC Employees registration into the scheme in terms of timeline

  • The unified form for the GCC Insurance Protection Extension Program
  • A copy of the passport
  • A copy of the Emirates ID
  • A copy of the Gulf ID card
  • A copy of the appointment decision or employment contract in accordance with the entity’s applicable action
  • A copy of the birth certificate (Kuwaiti Citizens)
  • A copy of the nationality certificate (Kuwaiti Citizens)
  • Service completion time: 2 Working Days for GPSSA to review the application. The total duration depends on the retirement authorities’ procedures outside the UAE
If the employee works for 1 year, is he eligible for pension or it is considered a temp role ?

If the employee works for one or more years, they will be eligible for and end-of-service gratuity according to our current pension laws

We have been trying to register one of our newly recruited Emirati employees under GPSSA since last week, but we are not receiving OTP from GPSSA on our registered email or phone number.  Please advise whom we should contact at GPSSA?

  • First, please verify if the registered employer file is active
  • Secondly, ensure the correct format of the email address entered to receive the verification code
 Can I know if we would like to transfer a GCC national employee between two sister companies that have the same owner? What is the process ?

According to GCC pension laws, there is no provision for transferring between private sectors. Even if the cooperation shares the same owner, the process involves completing end-of-service procedures and registering the employee as newly insured under the new company.

Is there also a plan to introduce a feature on the website that allows employers to view all payments made per insured employee for reconciliation purposes?

Yes, we are pleased to inform you that one of the new features in our upcoming pension platform includes a feature on the website that allows employers to view all payments made per insured employee for reconciliation purposes. This feature will provide enhanced transparency and facilitate efficient reconciliation processes for employers.

Once we will add local in in contract so after that how many days we have to add in Nafis

To provide you with accurate information, we recommend visiting the official Nafis platform or contacting their support team directly. This falls outside of GPSSA’s scope, and they would be best equipped to assist you with details on how the rebate is calculated and any related queries.

Hi, if I completed 20 years of service, am I eligible for retirement or there is a certain age I should reach?

Retirement eligibility is governed by specific conditions. Therefore, upon completing 20 years of service, you fulfill the first condition for retirement. However, entitlement to pension benefits is granted upon reaching the age of 50 and above

We have been trying to apply for an awareness workshop for months however the schedule is full, or the slots are not appearing?

Registration for awareness workshops opens at the beginning of each new month. If all listed days are booked, please contact the call center to submit a request to the relevant department. They will follow up with you to coordinate a suitable day when available.

Does the UAE national have 2 options when leaving a company?

  1. Keep the money in the pension and roll over to new role
  1. Cash out (end of service benefit)?
  • Yes, UAE nationals have two options when leaving a company:
  • They can either choose to retain their end-of-service gratuity in the pension fund for future use, particularly to benefit from the Shourak initiative and merging their service years , or
  • They can opt to receive their end-of-service gratuity as a cash payout
Hi Madam Sharifa. Would like to ask if there is a plan for the implementation on the portal for Pension Contribution Invoice. We would appreciate it if we can download the invoices every month

  • Currently, it is not possible to download the pension contribution invoices through the website. However, we have plans to implement a feature in the new platform where you can download the invoices every month
  • For any immediate assistance with pension contribution invoices, please contact us at [email protected]
Good morning! for UAE National, will the end of service be from GPSSA?

Yes, the end-of-services gratuity for UAE nationals will be paid from the GPSSA

Does the Company need to pay the full amount of eosb in the GPSSA?

Employers are only required to pay the monthly contributions to the General Pension and Social Security Authority (GPSSA) for their insured employees. The calculation and disbursement of the end-of-service gratuity is managed by the GPSSA and not the employer. However, if the insured employee’s salary in the private sector exceeds AED 50,000 the employer is responsible for covering the remaining amount

How is nafis connected to gpsaa? do we have to register in nafis too?

GPSSA validates the eligibility for Nafis by confirming the registration of the insured and the payment of contributions through electronic integration. For specific details regarding registration with Nafis, we recommend visiting the official Nafis platform or contacting their support team directly.

Is there any penalty in case of late payment of eosb?

  • If the insured is subject to Federal Law No. (7) of 1999 on Pension and Social Security there is no penalty for delaying the end-of-service request
  • If the insured is subject to Federal Law No. (57) of 2023 on Pension and Social Security there is a penalty if the end-of-service request is not submitted within 15 days after the last working day. The penalty is AED 200 for each day delayed
Is there any possibility for old employees to add the previous service with the new calculation as Shourak?

Unfortunately, the Shourak initiative only applies to insured individuals whose service has ended on or after 01/07/2023. It does not include those whose service has ended before this date.

Is the monthly payment for pension different from the eosb calculation or does the monthly contribution serve as the accumulated amount to get the eosb?

  • The monthly contributions are considered insurance of the contribution salary and are non-refundable
  • The end-of-service gratuity is calculated separately based on the average contribution salary. For the private sector, it is calculated based on the average contribution salary for the last five years. For the government sector, it is based on the average contribution salary for the last three years
If any employer by mistake paid more contribution, how can the employer recover the excess amount paid?

  • Please send an email to the contribution department with the payment details. They will process the refund to the employer.
  • Contact: [email protected]
  • Ensure to include all relevant details in the email (amount, bank name, company name, transaction date)
What are the required documents for adding previous service with Abu Dhabi fund in case the insured has for not to receive the gratuity

The insured must provide a letter from the Abu Dhabi Fund stating the insured’s employment details and the calculated gratuity amount.

Last year GPSSA presented a new pension system Ma’ashi. any update on when the system will be launched?

GPSSA is planning to launch the new Ma’ashi platform this year. We will keep you updated on any further developments. Thank you for your patience and interest.

Would it be possible to implement a portal for generation of invoice?

  • Currently, it is not possible to download the pension contribution invoices through the website. However, we have plans to implement a feature in the new platform where you can download the invoices every month.
  • For any immediate assistance with pension contribution invoices, please contact us at [email protected]

We have case which we have candidates on hold since 3 months because they are not canceled from their previous employer and they have an issue with the company in their payment contribution, but as company i can hire him/her since a can genarate a work permit for them but i will not be able to register them even after one month in this case what is the best scenario company can follow ? 

You can start paying the monthly contributions using the insured person’s ID number to avoid monthly penalties. Regarding registration, the registration team: [email protected] can assist you in temporarily closing the previous file so that you can proceed with registering them 

 

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