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02 December 2023

UAE retirement age set to go up by one year from February-end

Some people find their own retirement metaphor... by detoxing from work stress, liberation from the daily grind (Shutterstock)

By Shuchita Kapur

The UAE’s official retirement age will be increased by one year at the end of February 2016, in accordance with Federal Law No. 7 of 2007.

The retirement age for UAE nationals, which was 48 years, will be raised by one additional year, making it 49 by the end of this month.

“With effect from February 28, 2016, the minimum retirement age for Emirati employees will be increased to 49,” Jamie Liddington, Head of Employment at Hadef & Partners, confirmed to Emirates 24|7.

“However, in order to be eligible to receive their full pension benefit, Emirati employees must also have accrued at least 20 years’ service prior to the date of their retirement,” he told this website.

“This increase is in accordance with Federal Law No. 7 of 2007, which clearly conveys the UAE Government's intention to bring about a gradual rise in the retirement age of UAE nationals,” said Liddington.

He noted that the official retirement age for UAE nationals is set to go up further next year. “It is likely that there will be a similar increase (to a retirement age of 50) in 2017 although there has not yet been any official announcement in this regard,” he said.

The UAE’s General Pension and Social Security Authority (GPSSA) stresses that it is important to take the age requirement into account if employees wish to resign and retire.

There is a difference between pension eligibility and the date of pension disbursement.

“If the employee resigns after completing the service duration that makes him/her eligible for retirement, i.e., 20 years, he/she will still not be entitled to the pension unless reached 50 years of age,” says the GPSSA.

This, it said, is according to the amendment of the Law in 2007 which stipulates that this condition applies to the persons who have reached 40 upon the date of implementation of the amendment (February 28, 2007), and that “the age shall be increased year by year until reaching the age of 50.”

It adds: “Accordingly, the entitlement to the pension upon resignation requires that the insured had reached 48 years of age and that his/her service period is not less than 20 years, taking into account that, starting from 28th of February, 2016, the age requirements for pension entitlement will become 49 years of age combined with 20 service period.”

The Hadef expert highlighted that the gradual increase in retirement age underlines the government’s objective to increase the number of UAE nationals in the private sector workforce.

“The impending change is consistent with the UAE Government’s stated intention to increase the number of Emiratis working in the private sector and also to reduce the population’s dependency on the State by encouraging people to remain in work for longer,” said Liddington.

“Similar increases have been seen in recent years in other jurisdictions (e.g., the United Kingdom), where retirement age was reviewed as a result of increases to the average life expectancy and the economic benefits associated with delaying retirement,” he said.

Meanwhile, the retirement age for expats in the UAE is 60 years even as the UAE’s Ministry of Labour does accept requests for work-permits of individuals over the age of 60 years, up to the age of 65 years.

Expat employees, however, are not eligible for UAE pension, but they are paid gratuity, an end-of-service pay out.