- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 05:24 06:42 12:10 15:09 17:32 18:50
Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region, today announces the final details ahead of the launch of its new DIFC Employee Workplace Savings Plan (DEWS) that will secure the financial future of more than 24,000 employees based at the Centre.
DEWS is a progressive end-of-service benefits plan which will be introduced within the DIFC from 1 February 2020 to restructure the current defined benefit end of service gratuity scheme into a funded and professionally managed, defined contribution savings plan. The initiative also offers employees the ability to make voluntary savings into DEWS, allowing employees working in the DIFC to plan and secure their financial future with ease.
DEWS will 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 investment risk with their contributions.
DEWS benefits for employers and employees at DIFC
As a leading international financial centre, DEWS will support over 2,300 DIFC-based companies’ ability to attract and retain the most qualified professionals in the region, and globally by offering employees the ability to earn returns on their savings through a regulated and reputable plan. DIFC-based companies will also benefit from clear guidance on their liabilities to employees continuously, with assurance of no further financial obligations once the contributions have been made.
In addition to making voluntary savings on top of employers’ contributions to secure long-term savings goals, employees will also have the choice and flexibility to decide how savings will be managed according to their preferred level of risk, including Sharia-compliant options. Employees will receive greater cash flow certainty with end-of-service entitlements spread over the full tenure of service to the employer instead of when their service ends. DEWS will also provide financial protection for employees in circumstances such as organisations entering administration or going out of business.
His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of Dubai International Financial Centre said: “The new initiative is aligned with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to transform the emirate into a ‘land for talent’ where the world’s brightest minds have a productive environment to innovate and create value. The launch of DEWS is part of our efforts to put in place a supportive environment for talent by creating greater financial security for employees of DIFC-based companies. We firmly recognise that our future growth will be driven by our capacity to continue attracting skilled and talented people. As part of Dubai’s broader plan for the future, DIFC continually reviews its policies to ensure we are attractive to talented individuals across the world. We are committed to building the best conditions for the world’s leading financial talent to flourish in Dubai.”
His Excellency Essa Kazim, Governor of DIFC said: “DEWS makes clear that we are committed to giving our 24,000 professionals the ability to make measured choices in relation to their finances that will lead to greater protection and returns at the end of their service or retirement.”
“Being at the heart of the new Dubai Future District, we fully support the UAE’s National Agenda and Dubai Plan 2021 while remaining committed to enhancing our international business environment. We believe forward-thinking laws and regulations will help us transform the future of finance, as we deliver on DIFC’s 2024 growth strategy.”
“As we unlock the DIFC’s growth potential through our upcoming expansion, DEWS will help ensure we attract the world’s finest and highest skilled talent to the DIFC so that business professionals enjoy easy access to the MEASA region from a dynamic hub that is fully in line with international best practice.”
Managed by a panel of expert key service providers
DIFC selected award-winning expert institutions as key service providers for the DEWS Plan following an extensive and detailed selection process, prioritising companies renowned for having a well-tested international track record and also having a DIFC presence.
Global professional services provider, Equiom, will act as master trustee of DEWS and the independent legal owner of contributions made by employers, while ensuring the beneficial interest lies with employees. Meanwhile, Zurich Middle East and its DIFC-entity Zurich Workplace Solutions will provide full support to employers and employees through the administration and management of DEWS. Investment services provider, Mercer, will bring an independent, tried and tested investment process to the master trustee of DEWS.
Kazim added: “Each DEWS partner has a solid international reputation that collectively dates back more than 70 years and they have consistently demonstrated exceptional capabilities and commitment to the UAE.”
DIFC continuously enhances its legislative infrastructure to support business with access to opportunities within the fast-growing MEASA region. The recent enactment of the new DIFC Employment Law Amendment Law No. 4 of 2020, replaces the current end-of-service gratuity payment regime that has been in place since the inception of the DIFC in 2004. As part of the amendment, DIFC-based employers will have until 31 March 2020 to enroll into a Qualifying Scheme, which includes the best-in-class default Qualifying Scheme, DEWS.
Independent supervisory board for clear oversight
DEWS will have clear oversight through the DIFC Supervisory Board which was established by the President of the DIFC. It is comprised of DIFC Authority representatives, a DIFC employer, a DIFC employee representative and independent chairperson to oversee the continuing governance and commercial aspects of the scheme that are not subject to regulatory supervision. This DIFC Supervisory Board ensures the interests of all employers and employees based in the DIFC are protected. The Dubai Financial Services Authority (DFSA) will oversee regulatory aspects of the master trustee and scheme administrator’s duties.
Contributions and costs
DEWS is designed to be as cost-effective as possible for employers and employees. It does not apply any entry or exit charges to employers associated with its administration. Employees will only be subject to an annual management charge ranging between 1.26 to 1.33 per cent, depending on their investment risk profile, which covers the services of the trustee, administrator, the investment adviser and the underlying funds with no other fees being charged whatsoever. The competitive rate aligns with international best practice, similar to savings schemes worldwide.
Under DEWS, the minimum employer contribution rates have been designed to broadly match minimum accrual rates under the existing end of service gratuity payment system. Employers are required to make a minimum contribution of 5.83 per cent of an employee’s basic salary with less than five years’ service. The minimum contribution increases to 8.33 per cent of an employee’s basic salary for five years or more of service.
Through DEWS, DIFC-based employees can make additional voluntary contributions via salary deductions, creating further opportunities to boost savings toward meeting future finance objectives. Voluntary contributions can be made as a regular or single contribution and will be deducted from an employee's salary.
Employers seeking to opt out of DEWS will have to implement a Qualifying Scheme and apply to DIFC Authority (DIFCA) to obtain a Certificate of Compliance.
For more information about DIFC Employee Workplace Savings Plan, please visit: https://www.difc.ae/business/operating/employee-workplace-savings/?utm_source=corp_comms&utm_medium=press_release&utm_campaign=DEWS
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