Dubai: The UAE has launched a landmark initiative transforming traditional end-of-service gratuity into an investment-based savings system designed to benefit millions of private-sector employees.
The Ministry of Human Resources and Emiratisation (MoHRE) has introduced the UAE Savings Scheme, allowing end-of-service benefits to accumulate and grow through regulated investment funds — turning what was once a one-time payout into a long-term, income-generating asset.
Here are 10 key ways the UAE’s new end-of-service savings scheme helps your gratuity grow like an investment:
1. Gratuity becomes an active investment
Under the new system, employers contribute monthly to investment funds on behalf of employees. These contributions are invested professionally, and employees receive both the principal amount and any returns when they leave the job.
2. Monthly contributions instead of lump-sum payouts
Employers are now required to make regular contributions instead of waiting until the end of service.
- 5.83% of the basic monthly salary for employees with less than five years of service.
- 8.33% for those with more than five years.
Payments must be deposited into investment funds within 15 days of each month’s start.
3. Four trusted investment funds
All contributions are directed into one of four SCA-approved funds, ensuring security and professional management:
- Daman Investments End of Service Programme
- First Abu Dhabi Bank (FAB) Fund
- Lunate Fund
- National Bonds Sukuk Fund
Each fund offers flexible growth opportunities tailored to different financial goals.
4. Investment options for every risk profile
Employees can choose portfolios according to their comfort level and preferences:
- Capital-guaranteed portfolios (no risk to principal)
- Risk-based investment portfolios (higher return potential)
- Sharia-compliant funds (aligned with Islamic finance principles)
Unskilled workers are automatically assigned capital-guaranteed portfolios, while skilled employees can select their preferred investment type.
5. Option to make voluntary contributions
Employees may voluntarily contribute up to 25% of their annual salary, either through monthly deductions or one-time payments.
These contributions earn returns and can be withdrawn at any time — partially or in full.
6. Flexible payouts and portability
At the end of employment, employees receive:
- 100% of employer contributions, plus
- All investment profits earned during service.
They may either withdraw the full amount or keep it invested to continue growing. When switching jobs, savings can be transferred seamlessly to the new employer’s chosen fund.
7. Inflation protection and security
Funds are independently managed under strict regulation, ensuring protection against inflation and employer insolvency.
Even if a company closes, the employee’s funds remain secure, accessible, and unaffected.
8. Predictable costs for employers
Employers benefit from predictable monthly contributions and improved budgeting compared to large end-of-service payouts.
The scheme also boosts an organisation’s reputation for supporting employee financial wellness and retention.
9. Broader eligibility and inclusion
The programme has expanded beyond private-sector employees to include:
- Freelancers and self-employed permit holders
- Non-UAE nationals in government-linked entities
- UAE nationals (in addition to pension and social security schemes)
10. Strong oversight and easy access
The system is jointly overseen by:
- MoHRE, which handles employment-related matters
- Securities and Commodities Authority (SCA), which regulates fund performance
Employees can easily track, withdraw, or transfer their funds through official MoHRE channels upon job completion.
Bottom line
The UAE’s Savings Scheme redefines the future of employee benefits — transforming gratuity into a professionally managed, investment-driven system.
It offers growth, flexibility, and financial security for workers, while giving employers a sustainable and cost-efficient model.
Your gratuity no longer waits until the end of service — it grows with you, every month, as you build your career in the UAE.
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