A new workplace savings platform from global insurer Zurich and investment consultancy Mercer aims to prevent UAE employees from losing out in the gratuity shortfall.
The partnership between Zurich - which has more than $4 billion assets under management for 730 companies - and Mercer, the world's largest investment consultancy with $227bn of assets under management, aims to fill the region’s savings gap via its defined contribution workplace product. The platform recently received approval from the UAE Insurance Authority.
"End of service benefits are beyond their 'sell-by' date - it was never designed to address retirement savings needs," Peter Cox, head of international pension plans sales, at the Swiss insurer Zurich, told The National. "Employers should recognise this and do more to facilitate long-term savings through the workplace."
Mr Cox said Zurich's MySavings plan is designed as an appropriate vehicle for gratuity funding or for providing a top-up to this statutory entitlement.
By law all UAE employees receive an end of service benefit, commonly referred to as a gratuity, when they leave their firm. However, the benefit has received criticism in the past for being an inadequate method for residents to save for retirement as it is calculated on an employee’s base salary.
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Read more:
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How to ensure a smooth exit from the UAE when it's time to relocate
Gratuity Calculator app helps resigning UAE employees figure out what they’re owed
Middle East companies not setting aside enough money for end of service benefits, study asserts
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In a YouGov poll of 1,000 UAE expats in full-time employment, commissioned by Zurich and Mercer in 2017, eight in 10 said the gratuity payment was not enough to cover their retirement expenses, while 78 per cent said their employer should do more to help them prepare for their financial future.
Alternative pension plans – where money is deducted from an individual’s salary with the corporate employer typically topping up the contribution - already exist in the region from a number of providers, including Zurich.
National Bonds, a Dubai-based investment company, also offers an employee savings scheme allowing all income levels to save a fixed amount each month.
"Workplace saving schemes are a good way to encourage employees to save, as the money comes straight out of your salary monthly and companies can also make contributions. There is a danger, though, that employees get trapped in inflexible plans with high total fees and have no idea what their money is invested in," said Steve Cronin, the founder of DeadSimpleSaving.com, which helps residents invest their finances.
With much criticism in the UAE in recent years around fixed-term savings products that lock consumers in, Mr Cox said employees would be free to withdraw their holding from the MySavings scheme "subject to whatever employer specific vesting rules apply".
Mr Cronin said employees must check details of any savings plan carefully to ensure their savings are easy to access and they should demand full transparency on fees.
Mr Cox said: "There is no cost of joining or leaving the plan. No hidden charges apply, as no savings term has to be specified at outset - this is a clean contract. The fees would be based on overall assets under management and would be calculated prior to implementation, and in agreement with each employer."
He added that the plan's assets will be invested in "a range of risk-profiled, multi-asset funds designed and managed by Mercer".
THE POPE'S ITINERARY
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
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Bio
Born in Dibba, Sharjah in 1972.
He is the eldest among 11 brothers and sisters.
He was educated in Sharjah schools and is a graduate of UAE University in Al Ain.
He has written poetry for 30 years and has had work published in local newspapers.
He likes all kinds of adventure movies that relate to his work.
His dream is a safe and preserved environment for all humankind.
His favourite book is The Quran, and 'Maze of Innovation and Creativity', written by his brother.
Company%20Profile
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PREMIER LEAGUE FIXTURES
Saturday (UAE kick-off times)
Watford v Leicester City (3.30pm)
Brighton v Arsenal (6pm)
West Ham v Wolves (8.30pm)
Bournemouth v Crystal Palace (10.45pm)
Sunday
Newcastle United v Sheffield United (5pm)
Aston Villa v Chelsea (7.15pm)
Everton v Liverpool (10pm)
Monday
Manchester City v Burnley (11pm)
COMPANY%20PROFILE
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Checks continue
A High Court judge issued an interim order on Friday suspending a decision by Agriculture Minister Edwin Poots to direct a stop to Brexit agri-food checks at Northern Ireland ports.
Mr Justice Colton said he was making the temporary direction until a judicial review of the minister's unilateral action this week to order a halt to port checks that are required under the Northern Ireland Protocol.
Civil servants have yet to implement the instruction, pending legal clarity on their obligations, and checks are continuing.
Our legal advisor
Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.
Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation.
Education: Sagesse University, Beirut, Lebanon, in 2005.
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
RESULTS
2.30pm Jaguar I-Pace – Conditions (PA) Dh80,000 (Dirt)
1,600m
Winner Namrood, Antonio Fresu (jockey), Musabah Al Muhairi
(trainer)
3.05pm Land Rover Defender – Maiden (TB) Dh82,500 (D)
1,400m
Winner Shadzadi, Tadhg O’Shea, Bhupat Seemar
3.40pm Jaguar F-Type – Maiden (TB) Dh82,500 (Turf) 1,600m
Winner Tahdeed, Fernando Jara, Nicholas Bachalard
4.15pm New Range Rover – Handicap (TB) Dh87,500 (D) 1,400m
Winner Shanty Star, Richard Mullen, Rashed Bouresly
4.50pm Land Rover – Handicap (TB) Dh95,000 (T) 2,400m
Winner Autumn Pride, Bernardo Pinheiro, Helal Al Alawi
5.25pm Al Tayer Motor – Handicap (TB) Dh95,000 T) 1,000m
Winner Dahawi, Antonio Fresu, Musabah Al Muhairi
6pm Jaguar F-Pace SVR – Handicap (TB) Dh87,500 (D) 1,600m
Winner Scabbard, Sam Hitchcock, Doug Watson
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
The biog
Age: 30
Position: Senior lab superintendent at Emirates Global Aluminium
Education: Bachelor of science in chemical engineering, post graduate degree in light metal reduction technology
Favourite part of job: The challenge, because it is challenging
Favourite quote: “Be the change you wish to see in the world,” Gandi
COMPANY%20PROFILE
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