Retirement Options for UAE Workforce

Retirement Planning


UAE residents are said to delay saving for their retirement longer than other world population. The same is also true for expatriates working in the UAE. While this may be due to a number of reasons, GCC (Gulf Cooperation Council) countries have implemented state pension schemes for their citizen employees.

Pension law

Under the amended Pension and Security Law no. 7 of 1999, eligible GCC and UAE nationals working in the UAE should register with the General via their employers. Non-UAE, GCC citizens register in accordance with schemes in their home countries. This law applies equally to all employers regardless of whether they are in the free zones. Read more on FAQ’s on this law.


UAE national employees who are holders of a ‘family book’ are entitled to register and receive pensions. GCC nationals on the other hand, qualify on their nationality and the ability to prove they are nationals of GCC states. Non qualifying citizens get end of service gratuity payments or can register with a pension scheme of a qualifying company. Employers must first be registered with the GPSSA (Pensions and Social Security Authority) in order to enroll eligible employees. Employees must be registered within a month from their period of employment.

Contributions payment

Both the employer and employee must pay their contributions to the employee’s fund. The employer is allowed to deduct his contribution from the employee’s salary and remit both his and that of his worker at the same time. It is the sole responsibility of the employer to ensure timely collection and payment. Contribution rates and any applicable caps vary according to nationality. This is because upon registration, pension schemes of the various countries are considered and abided by.

End of service gratuity (ESG) and opting out

ESG is payable only to qualifying expatriates and non-pension-qualifying UAE and GCC employees. Employers are not obliged to pay pension contributions for expatriate employees hence the need for end of service gratuity. The law does not have provisions for opt-out of contributions even with the qualified employee’s consent. However, court rulings show that a registered employee can choose to receive either ESG or pension scheme payments, whichever suits best, but not both.

Claims and non compliance

There is no time limit for claims. This means that failure on the employer’s side to register a qualifying employee cannot lapse because of time. Such an employee can still make valid claims for contribution or through GPSSA even after end of employment service. Failure to register employees earns the employer AED 5,000 fine per person. Late contributions earn 0.1% fine of the total monthly amount payable and is calculated every overdue day.

Abu Dhabi pensions

This state has a different authority, Abu Dhabi Retirement and Pensions Fund (ADRPF), under the “Civil Pensions and Benefits in the Emirate of Abu Dhabi Law No. 2 of 2000.” It only manages pensions on behalf of Abu Dhabi and UAE nationals and not GCC nationals who are still under GPSSA.