The Abu Dhabi Pension Fund has made changes to the retirement law and introduced new features to further enhance equal access to benefits among UAE employees working in the public and private sector in Abu Dhabi emirate. The changes aim to maintain a competitive and sustainable retirement system that ensures equality between public and private sector employees. The amendments will ensure an advanced and flexible retirement plan that aligns with citizens’ career aspirations and needs, and provides them with the opportunity to receive better retirement benefits after completing the maximum number of years’ service.
The amended law applies to all currently insured citizens and does not affect their current rights. Insured citizens retain the right to calculate their pensions based on the service periods applicable under the previous system. This also applies to other insurance benefits available to insured citizens under the previous system.
One of the key amendments to the pension law includes increasing the maximum pensionable sum to 100 per cent of the deductible salary after completing the maximum number of years’ service. Up to 25 years, insured citizens will receive a retirement pension equivalent to 80 per cent of their salary, subject to deduction.
After they have completed 25 years of service, they will have the option to increase this percentage by an additional two per cent per year, to reach a maximum of 100 per cent of the deductible salary. This is an additional benefit that was not available under the previous retirement system, which offered a maximum pensionable sum of 80 per cent of deductible salary, even after individuals had reached the maximum number of years’ service.
The Abu Dhabi Pension Fund highlighted that the amended retirement law ensures equality for all UAE nationals working in the public and private sector through the standardisation of the pension calculation process for all currently insured and newly employed citizens, to be calculated based on the average deductible salary for the past six years of service. Additionally, the maximum deductible salary is now set at a limit of AED100,000 for those entering job market.
According to the amended law, the percentage of monthly retirement contributions has remained the same, at 26 per cent of deductible salary, with newly insured employees bearing 11 per cent of the contribution, and employers paying 15 per cent. Deduction percentages of those currently insured (continuing to work) are not affected.
According to the amended law, the minimum retirement age has been set at 45 years, provided 25 years of service have been completed. This retirement age will now gradually increase at a rate of 6 months every year until it reaches the new minimum retirement age of 55 years.
With a focus on recognising the pivotal role of families in shaping and advancing society, the revised retirement system incorporates special provisions for female employees with children, offering them early retirement benefits.
The amendments also include the option for female employees with children who wish to temporarily leave work due to family commitments to continue receiving retirement contributions from Abu Dhabi Pension Fund during their leave period, to ensure continued retirement benefits. The same benefit is also available to insured citizens who want to continue their higher education, as per the guidelines specified by the law.
The amended law also allows insured citizens to access a combination of their retirement pension and salary after completing the maximum number of years’ service or on reaching the retirement age specified by law, as part of efforts to enable UAE employees to continue contributing to various aspects of the national economy over a longer period.
Insured individuals who meet the retirement criteria under the previous retirement system will remain eligible for retirement under the new retirement system. They will be given the option to continue working to take advantage of the new benefits provided by the amended scheme, including the possibility of increasing the retirement pension percentage to 100 per cent of the deductible salary on completing the maximum number of years of service.