UAE News Today : Politics

The United Arab Emirates announces a new Federal Pension Law that improves the flexibility of social security services

It also aims to improve the flexibility of pension and social security services in the UAE and mitigate any gaps in services and policies provided to UAE nationals working in the government and private sector. Additionally, the Law will bring greater equality in insurance benefits to encourage UAE nationals to join private sector companies.

First time employees

The new Federal Decree Law will apply to Emirati employees who entered the labor market for the first time from the date of its publication in organizations participating in the GPSSA. Current employee participants will continue to be covered by the provisions of the current Federal Law No. (7) of 1999 on Pensions and Social Security.

The pensioner who is receiving a pension in accordance with the provisions of the aforementioned Federal Law No. (7) of 1999 or any previous law will also continue to be covered by the current law. The insured who has received an end-of-service bonus in accordance with the provisions of Federal Law No. 7 of 1999 or any previous law, will continue to be covered by the current Federal Law No. (7) of 1999, even if they initiated a new job after the date of issuance of the new Federal Decree Law No. (57) of 2023.

Monthly contribution

The monthly contribution of the insured is defined as 26 percent of the salary from the insured’s contribution account, the insurer bears 11 percent of the salary from the insured’s contribution account, the employer bears 15 percent of the salary of the insured’s contribution account and the government bears 2.5 percent. percent share of private sector employers for UAE national workers whose contribution account salary is less than Dh20,000, to encourage the recruitment of UAE nationals in the private sector.

Pension calculation

To unify general rules between the government and private sectors, the pension calculation mechanism is determined based on the average salary in the contribution account for the last six years of the subscription period (or, if less, of the entire period. contributions) for employees in both the government and private sectors. sector.

In accordance with the provisions of the new Decree Law, the insured worker is authorized to consolidate the previous periods of service into his total pension, for any employer to which this Decree Law is applicable. The insured may also consolidate the previous period of service to acquire UAE nationality and periods of prior service in any entity approved by the UAE Cabinet at the suggestion of the Board of Directors of the Authority.

Minimum age

The minimum age for the insured to be entitled to a retirement pension is 55 years, with a minimum subscription period of 30 years. In support of the vital role of the family in society, the new Law gives working mothers more flexibility and benefits. It stipulates that the working mother can request the right to the retirement pension at an earlier age and with a shorter subscription period. She is also authorized to maintain her optional subscription if she has chosen to take leave to care for her children, in accordance with the terms and conditions. The new Law authorizes the insurer to benefit from optional underwriting in the event that she requests unpaid leave to pursue postgraduate studies.


The monthly subscription salary for the government sector consists of the basic monthly salary of the insured, plus monthly allowances, which include: cost of living allowance, child welfare allowance, UAE national social allowance and housing allowance, provided that the value of the salary in the insured’s contribution account does not exceed 100,000 dirhams; However, in the private sector, the salary is determined by the employment contract, provided that the monthly subscription amount is not less than Dh3,000 and does not exceed Dh70,000.

Time of the work

The new law allows the insured to request the purchase of a nominal period of contiguous which will be added to his actual periods of service provided that he has worked an actual period of service of at least (25) years when submitting the purchase request, or a period of (15) years if they have reached the age of (60) years. The period required to be acquired must not exceed (5) years for both men and women.

The new Federal Decree Law introduced greater equality between public and private sector insurers. The pensioner whose subscription period has reached (30) years has the right to combine the pension with the salary, whatever its value. This combination applies to government and private sector retirees.

New jobs

The Law also stipulates that the pension payment will be suspended if the pensioner takes up a new job covered by the provisions of the new law in exchange for compensation (whether a monthly salary, a lump sum or a reward) if this compensation is equal to or greater than the value of the pension, and they will be paid the difference if the new salary is less than the amount of the pension. The pension will be reimbursed at the end of the service in accordance with the provisions of the Decree Law.

The Law has authorized the GPSSA to establish the executive regulations and conditions for employers and self-employed workers to benefit from this new Federal Law. The Minister of Finance will issue a decision after approval by the Board of Directors of the Authority. The GPSSA is also authorized to draft the executive regulations and conditions necessary to implement the provisions of the GCC Insurance Protection Extension Programme.

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