Dubai International Financial Centre (DIFC) has announced the launch of the DIFC Employee Workplace Savings (DEWS) scheme, which will offer end-of-employment benefits as part of a funded and professionally managed contribution plan.
In line with recent global employee benefit trends, DEWS will see the evolution of end-of-service benefits within DIFC from a defined benefit structure to a contribution plan. It will commence from January 2020, and aims to offer a low cost investment platform for receiving and managing mandatory employer end-of-service contributions on behalf of their employees and any added voluntary savings by employees, including cash or cash equivalent options for those members that do not want to take an investment risk with their contributions.
Mr Arif Amiri, Chief Executive Officer at DIFC Authority said: “The new DEWS scheme will reinforce our position as a jurisdiction that attracts and retains the very best professional talent from across the globe in accordance with best practice, including employee benefits. In line with the UAE’s National Agenda and Dubai Plan 2021, we are committed to creating a cohesive society and enhancing our business environment, as we deliver on our own 2024 growth strategy”.
The introduction of the new scheme will allow companies based in DIFC to know exactly what their liabilities to employees are at any given point, without any liability once paid. It will also facilitate cash flow requirements over the employment cycle of an employee by calculating an employee’s end-of-service gratuity based on their salary as and when they fall due, as opposed to when the employee’s service ends.
Meanwhile, employees will have benefit security, irrespective of an employer going out of business, while having the option to earn a return on employer’s monthly contributions, and to make their own supplemental contributions on top.
DIFC have announced the selection of the key service providers for the new scheme; Equiom, a global trust services provider, have been chosen to act as the trustee of DEWS, whilst Zurich Middle-East will be the scheme’s administrator. Zurich Middle-East will be assisted in its duties by Mercer, as an investment adviser, and Smart Pension as a technology services provider. Zurich Middle-East will soon start the on-boarding process with DIFC employers required to participate in the new initiative.
Employers in the DIFC will have the ability to opt out of DEWS in limited circumstances, provided that they have a qualifying alternative scheme approved by the DIFC Registrar of Companies. The guidelines as to what will qualify as a suitable alternative will be provided after 15th September 2019. For more details, please contact Alpha Management.