Dubai: Entities that have hired Emiratis as of October 31, 2023 will have to pay 26 percent of their income to the pension under Decree Law No. (57) 2023, while entities that hired Emiratis before October 31 they will continue to pay 20 percent. cent as established by Law No. 7 of 1999.
This was revealed by the General Authority for Pensions and Social Security in a press conference held in Dubai today.
It was revealed that a circular was sent to government and private entities with a detailed guideline on ways to transfer pension for Emiratis who joined the workforce on or after October 31, 2023 and who were not previously covered by the Law No. 7 of 1999.
How to pay the pension according to the new law
Under the new law, government and private sector employers have two options for paying the new pension amount.
Pensioners can pay contributions for three months (October, November and December 2023) at the previous rate of 20 percent and pay the six percent difference before January 1, 2024.
The second option available is for pensioners to pay the full amount of the 26 percent pension in accordance with Law No. (57) of 2023, starting from the date the insured joined work as of October 2023, regardless of the day.
Under the new law, the insured pays 11 percent of the pension amount, while the employer pays the remaining 15 percent. For Emiratis working in the private sector whose salaries in the contribution account are less than Dh20,000, the UAE government will bear a 2.5 percent rate as a form of support and encouragement to hire more Emiratis in the private sector .
Maximum salary in contribution account
The percentage of contributions paid according to the salary in the contribution account is a maximum of 100,000 dirhams for public sector employees and 70,000 dirhams for employees in the private sector, provided that the salary in the contribution account of the employee working in the private sector is not less than 3 dirhams. ,000.
The entities will not bear any additional amount as a result of the delay in the payment of contribution differences corresponding to the three months between October and December 2023, as long as the employer undertakes to be accurate in all the statements, data and documents that presented, including the details of the salaries of the insured and all the necessary documents for the purposes of calculating the assessed contributions, in accordance with the provisions of this legal decree, since this has a great impact on the balance sheet statements prepared subsequently. by the GPSSA.
GPSSA highlighted the importance of updating insured Emiratis covered by Law No. (57) of 2023 so that the pension transfer is carried out smoothly. The authority urged entities to send their designated employees to attend workshops and follow up on GPSSA awareness campaigns on the insurance obligations and benefits affiliated with the new law.
The law also does not apply to Emiratis who received an end-of-service gratuity before October 31, 2023, even if they return to work after continuing to be covered by the 1999 law. Ministers who retire before October 31 2023, even if they return to work afterwards, are not covered by the new law.
Retirement pension highlights
2.67% of the salary from the pension account for each of the 30 years of service, at a rate of 80 percent
4 percent of salary from pension account for each year for 30 years, at a rate of 20 percent
100 percent of salary from pension account for a service period of 35 years.
Payment of termination of service bonus at the rate of 3 months’ salary for a period of service greater than (35) years.
Beginning of the disbursement of the retirement pension: from the day following the cessation of service.
The minimum pension is 10,000 dirhams.