Emirati Citizens Encouraged to Ensure Uninterrupted Service for Entire Pension Entitlements
The United Arab Emirates (UAE) has established comprehensive pension regulations for its Emirati citizens, primarily governed by the General Pension and Social Security Authority (GPSSA) and the Abu Dhabi Pension Fund (ADPF) under Federal Laws No. 7 of 1999 and No. 57 of 2023.
**Pension Eligibility Criteria**
Emirati employees become eligible for pension benefits primarily after completing a minimum service period, which is typically **at least 20 years of service** under Federal Law No. 7 of 1999. The retirement age is commonly set around **60 years** for men and **55 years** for women, although recent legal amendments may allow flexibility.
Under Federal Law No. 57 of 2023, employees who continue working beyond **35 years of service** may receive enhanced pension benefits.
**Pension Calculation Methods**
Pensions are usually calculated based on the duration of service and the employee’s last drawn salary or average salary over a set period before retirement. With longer years of service, pension benefits increase, with a standard accrual rate per year worked.
Employer contributions to government pension schemes are mandatory, and these contributions are digitally recorded and used to calculate the pension benefits accordingly.
**Key Differences Between the Laws**
Under Federal Law No. 7 of 1999, 70% of the pension salary is granted after 20 years of service, increasing by 2% annually up to a maximum of 100% after 35 years. On the other hand, under Federal Law No. 57 of 2023, the pension is calculated at 2.67% per year up to 30 years, and 4% per year beyond that.
**Merging Employment Periods**
The GPSSA encourages Emiratis to merge their previous and future employment periods, especially for those who joined the workforce from July 1, 2023, through the "Shourak" programme. Failure to merge employment periods may result in a reset of pension contributions, requiring Emiratis to start accumulating service years from scratch.
GPSSA advises insured Emiratis to stay informed about their retirement benefits and to plan ahead to safeguard their retirement future. The authority is emphasizing the importance of continuous and uninterrupted employment for Emiratis.
For a clearer understanding of the pension eligibility criteria and calculation methods, refer to the following table:
| Criterion | Federal Law No. 7 of 1999 | Federal Law No. 57 of 2023 | |-----------------------------|------------------------------------|-------------------------------------| | Minimum Service Years | Typically ≥ 20 years | Benefits enhanced after 35 years | | Retirement Age | ~60 years (men), ~55 years (women) | Updated flexibility; possible extensions | | Pension Calculation Base | Last salary or average salary | Enhanced calculation for long service | | Employer Contributions | Mandatory to GPSSA, ADPF | Same, with digital processing as per 2023 Ministerial Decision | | Additional Benefits | Standard accrual per year | Additional benefits for >35 years service |
These laws reflect the UAE’s commitment to securing social benefits for Emirati nationals, with recent updates aiming to modernize pension management and potentially increase benefits for extended service periods.
The United Arab Emirates (UAE) encourages its citizens to plan for their future wellness and wealth management by merging their previous and future employment periods under the "Shourak" program, which may begin from July 1, 2023. This step can help Emiratis avoid a reset of pension contributions and ensure continuous accumulation of service years.
In the context of science and technology, the UAE government may leverage advancements in personal-finance and wealth-management software to help Emiratis better understand and manage their retirement benefits. Such tools could offer insights into future health-and-wellness expenses and investment opportunities which, in turn, could optimize their financial resources for a comfortable retirement.
The UAE's progress in streamlining pension regulations also sets the stage for future collaborations with global science institutions, focusing on research in workplace-wellness, as a means to improve the overall quality of life for its workforce and promote the country's productive growth in various sectors.
