The UAE’s retirement income system was ranked 22nd among 43 countries with long-standing pension systems such as the US, France and Spain.
Globally, Iceland took top spot followed by the Netherlands, while Thailand was ranked last, according to the 13th annual Mercer CFA Institute Global Pension Index, which included the UAE for the first time.
The index is a study of global pension systems that account for 65 per cent of the world’s population. It benchmarks retirement income systems around the world.
The UAE pension system scored highly compared with global peers in the areas of adequacy, sustainability and integrity, Mercer said on Tuesday.
“The UAE has a robust pension system in place for Emiratis, which is highlighted by its entry into our annual MCGPI survey ranking alongside many peers that have more established systems,” said Hazem Abdel-Rahman, Mercer’s retirement business leader for the Middle East.
“As life expectancy continues to rise, the UAE may benefit from increasing the retirement age; this is a step many countries have already taken to ensure the ability to provide for ageing and future generations. Furthermore, introducing private pension plans as a complementary retirement programme will reduce the pressure on the social security programmes in the country and enhance the overall retirement income.”
Within the UAE, the pensions of Emiratis are administered by different agencies such as the Abu Dhabi Pension Fund, the Sharjah Social Security Fund and the General Pensions and Social Security Authority (GPSSA).
Emiratis working in government and private sectors are eligible for pensions and other retirement benefits after reaching the retirement age of 49 or serving a minimum of 20 years in total, according to the UAE government.
Non-Emirati employees have their end-of-service entitlements covered by the UAE’s gratuity programme.
While Abu Dhabi has its own pension scheme, the GPSSA is the federal body that administers pensions for the rest of the Emirates.
Under the scheme, if an employee contributes 5 per cent of their monthly salary, then a government employer contributes 15 per cent. For the private sector, employers contribute 12.5 per cent, which is topped up with a further 2.5 per cent by the government.
Retirees around the world will outlive their savings by about eight to 20 years on average, with the highest burden on women, according to a 2019 report by the World Economic Forum.
The combined retirement savings gap is expected to reach $400 trillion by 2050 between eight major economies – Canada, Australia, the Netherlands, Japan, India, China, the UK and the US, according to the WEF.
The UAE had an overall index score of 59.6 and was ranked 22nd on the Mercer index. The index uses a weighted average of the sub-indexes of adequacy, sustainability and integrity.
As life expectancy continues to rise, the UAE may benefit from increasing the retirement age
Hazem Abdel-Rahman,
retirement business leader for the Middle East, Mercer
The country scored 59.7 in adequacy due to the generous retirement benefits, which ensure a continued income to sustain a good quality of life with a suitable minimum pension relative to earnings, according to Mercer.
It scored 50.2 in sustainability, driven by the high labour force participation rate, especially for people above the age of 55. The score in this sub-index was bolstered by the sound structure of a funded pension system for Emiratis, with both the public and private sector setting aside mandatory contributions during an employee’s tenure, Mercer said.
The country scored the highest, 72.6, in integrity, owing to the strong governance structure around the pension system, it said.
Globally, Iceland had the highest overall index value at 84.2, followed by the Netherlands at 83.5. Thailand had the lowest index value of 40.6, according to Mercer.
For each sub-index, the pension systems with the highest values were Iceland, in terms of adequacy (82.7) and sustainability (84.6), and Finland, in terms of integrity (93.1).
For the UAE to improve, they need to implement reforms and more compensation measures to incentivise its pension system to balance its ageing and retirement ratio
William Tohme,
senior regional head of Mena, CFA Institute
In comparison with 2020, China and the UK showed the most improvement because of significant pension reforms, Mercer said.
“The UAE claiming a place in the top 22 ranking globally testifies [of] the UAE government’s commitment to ensuring long-term financial planning and well-being for its citizens,” said William Tohme, senior regional head of Middle East and North Africa at CFA Institute.
“For the UAE to improve, it needs to implement reforms and more compensation measures to incentivise its pension system to balance its ageing and retirement ratio.”
Areas of improvement in the UAE’s pension system include introducing a minimum access age to a person’s retirement benefit and increasing the state pension age in response to the country’s life expectancy, Mercer said.
What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
Killing of Qassem Suleimani
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Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
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No more lice
Defining head lice
Pediculus humanus capitis are tiny wingless insects that feed on blood from the human scalp. The adult head louse is up to 3mm long, has six legs, and is tan to greyish-white in colour. The female lives up to four weeks and, once mature, can lay up to 10 eggs per day. These tiny nits firmly attach to the base of the hair shaft, get incubated by body heat and hatch in eight days or so.
Identifying lice
Lice can be identified by itching or a tickling sensation of something moving within the hair. One can confirm that a person has lice by looking closely through the hair and scalp for nits, nymphs or lice. Head lice are most frequently located behind the ears and near the neckline.
Treating lice at home
Head lice must be treated as soon as they are spotted. Start by checking everyone in the family for them, then follow these steps. Remove and wash all clothing and bedding with hot water. Apply medicine according to the label instructions. If some live lice are still found eight to 12 hours after treatment, but are moving more slowly than before, do not re-treat. Comb dead and remaining live lice out of the hair using a fine-toothed comb.
After the initial treatment, check for, comb and remove nits and lice from hair every two to three days. Soak combs and brushes in hot water for 10 minutes.Vacuum the floor and furniture, particularly where the infested person sat or lay.
Courtesy Dr Vishal Rajmal Mehta, specialist paediatrics, RAK Hospital
