Picture for illustrative purposes only. ARCHIVE

The UAE’s new federal law on pension and social security encourages Emiratis to join the workforce across government and private sectors, according to the General Pension and Social Security Authority (GPSSA). According to the GPSSA, one of the most crucial steps introduced in the new law includes an increase in the contribution account ceiling, which was previously Dh50,000 and raised to Dh70,000 similar to the contribution account salary for insured individuals employed in international and political missions who are included in the pension law. Dh100,000 is now considered a maximum contribution account salary for employees working in the government sector. Additionally, the average pension account salary for employees across both government and private sectors is based on the last six years of work or for the entire contribution period if the service period is less than that. The new law provides insured Emiratis the opportunity to combine their pension and salary given that they spend 30 years of service in their entity, regardless of whether they work in a government or private sector, versus the 25-year service period required to be able to merge pension and the contribution account salary which was limited to employees working in the government sector solely, under the federal law. Private sector employees whose contribution account salaries are less than Dh20,000 are supported by the UAE government, who bear 2.5 percent of the entities share as a means of supporting the private sector to recruit Emiratis, leaving the employer responsible in paying 12.5 percent instead of 15 percent. ICA/Expat Media
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