What is the Golden Pension Scheme?
Working in the United Arab Emirates is definitely a good choice for many. But what about retirement? While the country stands out as one of the world's most attractive destinations for foreign professionals, little is known about its retirement pension system. What about foreign professionals who currently live and work in the country and are looking to stay in the long term? How do they go about their retirement? The Golden Pension Scheme looks like the answer to this question.
The scheme is an initiative of the Investment Corporation of Dubai, a state-owned fund. The fund owns National Bonds, a savings company from which originates the Golden Pension Scheme. In fact, the savings company provides employees with simple, low-risk investment plans.
The Golden Pension Scheme is basically a retirement savings scheme set up for foreign professionals in the country. Employees do not need to join directly, but their company does. The scheme works in two steps: first, companies register with the National Bonds. Then, they send a list of employees who wish to invest therein.
This means that the fund works with two stakeholders: the employees and the company. However, each of them can invest separately. As a matter of fact, employees are invited to make a monthly contribution of as little as 100 UAE dirhams off their basic salary. Moreover, they are free to withdraw their contributions at any time. They can also track their retirement savings progress in real-time via an application. Meanwhile, companies can invest all or part of the employee's end-of-service benefits in the fund.
What are the benefits of the Golden Pension Scheme for expats?
Following the global health crisis, many expatriates have been struggling financially. COVID has highlighted an imbalance, where while being thrilled to work in the United Arab Emirates, with all the benefits the state can offer, expats felt that little or nothing was done about the end of their career and retirement. According to a survey released last April, almost half of the foreign residents in the UAE were not subscribed to any retirement plan.
The primary purpose of the Golden Pension Scheme is to provide expatriates with a simple and accessible long-term savings option. They can seamlessly prepare for their retirement while pursuing their career. The scheme benefits from the government's oversight and the companies' participation, a combination that aims at guaranteeing a secure framework that respects the rights of foreign workers.
It is also a new signal sent to foreign professionals who wish to build a career in Dubai. Indeed, the UAE no longer wishes to be perceived only as a business-minded country. The country is looking to improve its image as a place where one can work, live, and retire with complete peace of mind.
The Golden Pension Scheme is part of Dubai 2030, the government's plan to make Dubai and the entire UAE a strategic hub for innovation and sustainable development.
