The Ministry of Human Resources and Emiratisation (MoHRE), in partnership with the Securities and Commodities Authority (SCA), has successfully established a comprehensive governance framework for the 'Savings Scheme' - an innovative initiative that serves as a voluntary alternative to the traditional end-of-service gratuity for employees in the private sector and is designed to elevate standards of efficiency, competitiveness and adaptability for all stakeholders.
The Savings Scheme offers significant advantages, primarily by streamlining business operations and boosting employee satisfaction. For businesses, it promotes a proactive approach to managing financial obligations and bolsters long-term financial health. Notably, the Scheme offers participating employers a more cost-effective solution in the medium term, as contributions are calculated based on the employee's basic salary during the payment month, rather than the typically higher salary at the time-of-service termination.
Moreover, the Scheme serves as a powerful tool for enhancing corporate reputation. Companies that adopt the Savings Scheme position themselves as desirable workplaces that prioritise their employees' financial well-being and future security. This strategic focus not only fosters employee loyalty but also helps attract top-tier talent, all while reducing the costs and administrative burden typically associated with lump-sum end-of-service payments.
Additionally, the Scheme amplifies private sector engagement in supporting the national economy and enhances the investment landscape in the country by invigorating financial and investment markets through capital infusion into investment funds. This creates long-lasting benefits not only for companies but also for the wider economy.
For employees, the Savings Scheme provides greater financial security. By directing funds that would otherwise go toward end-of-service gratuities into reputable, accredited investment vehicles, employees' savings can grow substantially over time. This approach supports the financial sustainability of private sector workers, enabling them to plan their careers with greater stability and confidence.
All companies can participate in the 'Savings Scheme', allowing them to register their employees with one of the four accredited savings funds: First Abu Dhabi Bank, Lunate, Daman Investments, and National Bonds Corporation. These funds have been approved for the service due to their adherence to essential criteria and stringent governance standards, which are continuously refined to enhance competitiveness and provide more options for stakeholders.
For these compelling reasons, we strongly encourage all companies to take the proactive step of registering for the Savings Scheme and harnessing its unique benefits. Seize this opportunity to achieve financial balance and pave the way for sustainable success.