Provident Fund scheme floated for UAE expats

A Shariah-compliant company, promoting savings culture in the country, has mooted the idea of setting up a scheme similar to provident fund for the benefit millions of expatriate workers in the UAE, Emirates 24|7 can reveal.

Under its Employee Savings Programme (ESP), National Bonds Corporation (NBC), a wholly owned subsidiary of the Investment Corporation of Dubai, said it offers tailor-made plans that allow employers to contribute equally or a percentage of their employee’s contribution to the 'PF' scheme.

It believes this will allow employers to retain and attract talent and promote financial awareness among employees.

“When the memorandum of understanding (master agreement) is negotiated with the employer, the option of a matching contribution is presented. The amount the employer would commit to the plan is flexible starting from one per cent to a 100 per cent in cases of executives and high ranking officers,” a NBC spokesperson said.

The ESP concept was established to allow employees of companies and organisations decide a predetermined percentage of their monthly income to be deducted at source and funds deposited in their respective account.

NBC, licensed and regulated by the UAE Central Bank, has currently more than 70,000 employees of Dubai Government enrolled in the ESP scheme.

The National Bureau of Statistics data reveals that expats account for 88.5 per cent of the UAE’s population of 8.2 million (2011). However, there is no pension scheme in the UAE similar to Singapore’s Central Provident Fund and Hong Kong’s Mandatory Provident Fund.

In September, Emarat Al Youm newspaper reported that the International Bank for Reconstruction and Development (World Bank) had recommended the establishment of a pension fund for expatriate employees in Dubai.

The recommendations were made in a study by the World Bank at the request of the Department of Economic Development in Dubai.

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