The UAE government has taken a significant step forward with Cabinet Resolution No. (96) of 2023, introducing an Alternative End-of-Service Benefits System.
This new scheme offers employees in the private sector and free zones the opportunity to invest in their future while safeguarding their financial security.
Why was this alternative system introduced?
Protection from Financial Risks:
Employees will have their end-of-service benefits protected from inflation, default, and bankruptcy by linking benefits to an investment fund. This ensures their savings retain value over time.
Flexibility and Market Appeal:
The new system enhances the labor market's attractiveness and flexibility by offering multiple investment options, including capital-guaranteed and risk-based portfolios.
Diverse Investment Opportunities:
By creating a regulated investment platform, the system helps employees access various economic opportunities across the UAE while adhering to Islamic Sharia principles.
Employer Participation:
Employers can opt into the system, selecting eligible employee categories to benefit from the program. This helps businesses build stronger relationships with their workforce by offering financial growth opportunities.
Overall, the new scheme aims to balance security and growth, benefiting both employees and employers. It's an innovative step that aligns employee benefits with global standards while maintaining UAE's distinctive labor market appeal.
Let's embrace this new chapter in employee benefits, empowering individuals to secure their financial futures!
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