The planned new system will include an enhanced gratuity scheme and a private sector savings programme.
A plan to set up investment funds for the retirement benefits of UAE expats has been set in motion, as the Federal Authority for Government Human Resources (FAHR) recently held a meeting with major firms regarding the system.
The planned new system will include an enhanced gratuity scheme and a private sector savings programme that will help retain talent in the country, according to authorities.
The FAHR said the meeting, held with leading local and international expert firms, looked into the best practices in the management of retirement funds and analysed which strategies would work best for the expatriate population of the country.
The meeting followed the Workers Incentives and End-of-Service Benefits Conference that took place in Dubai in February this year, in which officials had proposed that a savings scheme be created for expats.
"With accelerated technological advancements and the increased retirement age and years of service, there is an urgent need in the region to establish investment funds to manage retirement and end-of-service benefits, which will provide a saving opportunity to all employees in the UAE and the regional labour markets," Dr Abdul Rahman Abdul Manan Al Awar, director-general of the FAHR, said at the Dubai conference.
At the recent meeting, Al Awar said authorities have conducted a study that will help improve the end-of-service benefits system in the country. "The retirement funds will help employees plan properly by taking advantage of end-of-service benefits, enabling them to make use of their financial resources and creating jobs for new generations," he said.
"I believe the idea of creating a savings system for end-of-service benefits in all sectors is an important strategic step as it will be the first of its kind in the region."
Al Awar added that the roundtable meeting with major firms and experts involved an in-depth discussion of some of the key points mentioned in the study. Actual experiences, based on best international practices, were also tackled.
While conducting the study, several meetings were held with local governments, the Ministry of Finance, the Ministry of Economy, pension funds, the Securities and Commodities Authority, and Departments of Economic Development and Executive Councils in Abu Dhabi and Dubai.