04:05
ISSUE 4
Recent Developments As mentioned, employers are only expected to make monthly payments into DEWS for expatriate employees, as GCC nationals are qualified to register with the GPSSA. However, recent changes were announced by way of DIFC Law Amendment Law No.1/2024 (the “Amendment Law”). The Amendment Law requires employers to make top-up payments into a qualifying scheme for GCC national employees where there is a gap between their monthly pension contributions, and what they would have received had they been enrolled in DEWS. However, note that top-up payments will only be required where the difference is greater than AED 1,000. Prior to the Amendment Law’s introduction, GCC nationals may have been prevented from receiving end-of-service benefits that were fully comparable to the benefits given to their expatriate counterparts through DEWS, due to statutory pension caps. The “top up requirement” may then work to alleviate this imbalance. The Amendment Law also introduced provisions that apply in circumstances where an employee is considered to be a “Sanctioned Person” and is unable to be enrolled in DEWS or an alternative qualifying scheme due to their status. The Amendment Law defines a “Sanctioned Person” as “any individual, entity, body or organisation listed on a sanctions list issued and passed by the United Nations Security Council, any consolidated list of financial sanctions issued by the Federal Cabinet of the UAE or any other sanctions that may apply to a Qualifying Scheme
to make additional voluntary contributions from their monthly compensation. Employees are then granted the opportunity to select an investment plan from a number of options, ranging in risk. Once an employee is terminated, the contributions will be directly paid into their nominated bank account, or the employee can choose to remain invested in DEWS and obtain the benefits at a later date.
Benefits of DEWS DIFC payroll professionals may
“DEWS has effectively replaced the traditional payment of ESG to employees and may have mitigated said risk.” benefit from the organisation DEWS provides, as having a centralised online platform may allow them to handle the payment of end-of-service benefits with efficiency and ease. Furthermore, requiring monthly contributions may aid payroll professionals in effectively managing company cash flow, and avoid having to grapple with a growing liability that would incur upon the employee’s termination. The monthly contributions requirement may also benefit employees, by providing them with a sense of greater financial security. Furthermore, granting employees the opportunity to invest may allow them to play a more active role in securing their future finances.
Made with FlippingBook - Online magazine maker