A New Era for Expat Retirement Security: Expatriate workers make up a significant portion of the UAE’s workforce, and historically, their end-of-service gratuity was often the only form of “pension” they received in the UAE. Many expats would work a number of years, collect their gratuity lump sum, and perhaps use it to settle back in their home country or pay off debts. The shift to a funded pension scheme transforms that dynamic. Now, instead of a notional accrual on the employer’s books, expats have actual assets being set aside for them in a fund. This means their end-of-service benefit is not dependent on their employer’s future ability to pay; it’s being saved and invested during their employment. For expatriates, who may not have access to their home country’s social security or pension while abroad, this creates a much-needed personal retirement pot in the UAE.
Portability and Flexibility: One key aspect expats will look at is, “Can I take my money if I move to another country or job?” The new scheme addresses this with flexibility. When an expatriate leaves a job, they are entitled to their full accumulated balance (employer’s contributions plus returns) within 14 days
. They have the option to keep it invested in the UAE scheme even after leaving that employer
. This is huge – it effectively allows the expat to maintain an investment account in the UAE (potentially managed by HAYAH or the chosen provider) until they retire, even if they move elsewhere. In practical terms, an expat could work for Company A in the UAE for 10 years, then move to Company B in Singapore. They could choose to leave their UAE pension with HAYAH invested in, say, global funds. At retirement, they might have two pots – one from the UAE and one from Singapore – complementing each other.
Previously, the gratuity would just be cashed out on exit and unless the individual immediately reinvested it, it might not keep growing. Now, the default behavior can shift from “cash and spend” to “preserve and grow”. This encourages better long-term financial habits.
Compound Growth and Decumulation: Expatriates, particularly those who move countries often, sometimes suffer from fragmented retirement savings. By allowing continuous growth, the funded scheme can accumulate significant wealth given enough time. For example, consider an expatriate who starts in the scheme at age 30 with a salary of AED 20,000 (with 8.33% contribution, that’s ~AED 1,666 per month contributed). Without any voluntary additions and assuming a modest 5% annual investment return, by age 60 (if they left it invested), that could grow to roughly AED 1.5 million. If they also added their own contributions or got higher returns, it could be much more. HAYAH’s decumulation strategies become relevant here: that AED 1.5 million could be converted into an annuity or a drawdown plan to provide a monthly income in retirement, perhaps on top of any home country pension the expat might have. HAYAH plans to expand into offering wealth management and retirement income products
, which means an expatriate could potentially purchase an annuity from HAYAH that pays them a guaranteed income for life, using their accumulated fund. For someone retiring in their home country, getting a regular wire transfer from HAYAH as a pension could be an attractive proposition – essentially turning what was once a one-time gratuity into a lifetime income stream.
Benefits for Short-Term Expats: Not all expatriates stay for decades; many might come for a 5-7 year stint. Under the old system, if they left before 5 years, they got a somewhat smaller gratuity calculation (in some cases 7 days per year for the first 5 years). The new scheme doesn’t penalize short stints in that way – every month contributed is fully theirs, with investment returns, regardless of tenure
. This makes UAE employment more attractive for those who might be on shorter international assignments, because they know they are building portable savings from day one (after probation period, presumably). If they leave after 3 years, they take whatever’s accumulated; no forfeiture. Additionally, they can withdraw their own voluntary contributions at any time even while working
. For expats, this is a valuable emergency feature – for example, if a family need arises back home, they could tap into what they’ve voluntarily saved (though not the employer’s core contributions) without losing the scheme membership. It provides a kind of self-funded safety valve which the old gratuity (locked until leaving the job) did not.
However, with this freedom comes the need for guidance: expats should be cautioned (and HAYAH can help do so) that withdrawing too much too early can undermine retirement goals. It’s akin to taking a loan or withdrawal from a 401(k) in the US – useful in emergencies but ideally avoided. Financial education, again, is key.
Expatriate Financial Planning with HAYAH’s Support: Many expats juggle financial commitments in multiple countries – maybe a mortgage back home, children’s education planning, etc. The HAYAH digital platform can serve as a financial planning hub. Through tools and possibly access to financial advisors, expats can see how their UAE pension fits into their global picture. For instance, HAYAH (with additiv’s wealth platform) could allow an expat to input other savings and simulate their overall retirement readiness. This kind of integrated planning is a value-add that a digital-first provider can offer, differentiating the experience from a simple bank account.
HAYAH’s experience with diverse workforces (350+ companies across GCC
) means they understand cultural differences in attitudes to saving. For example, some expats from countries with weak pension systems might be very eager to save, while others from places with strong pensions might not prioritize it, thinking their home system will suffice. HAYAH can tailor communication: perhaps reassuring the latter group that contributing in the UAE scheme will supplement their home pension and enable a more comfortable multi-location retirement.
Shariah-Compliant and Custom Investment Choices: A notable benefit for many expats (especially from Muslim-majority countries) is the availability of Shariah-compliant investment funds under the scheme
. This means they can save for retirement in a way that aligns with their faith, which might not have been straightforward if they just took a gratuity and invested it on their own. HAYAH, being experienced in Takaful (Islamic insurance) and Shariah-compliant products, ensures that those who want a non-interest, ethically screened investment path have that option. This can increase participation among those who might otherwise be hesitant to invest due to religious considerations.
Greater Confidence and Settlement Planning: With a funded pension, expats can plan their eventual retirement or relocation with more certainty. For instance, an expat planning to retire back in their home country can decide to leave the UAE at, say, age 55, but continue investing their UAE pension until age 60 within HAYAH’s platform, then take a payout or annuity. Or, if rules allow, they might even transfer it to a pension scheme in another country (future possibility if portability agreements are reached internationally). Knowing that the money is independently managed gives expats confidence – they don’t have to worry about chasing a former employer for payment or currency devaluation of a promised amount, etc. In fact, funds can likely be withdrawn in different currencies if needed, since these are investment accounts. HAYAH could assist with a smooth repatriation of funds, offering good forex rates or advice on transferring the money, thereby reducing the friction of moving money across borders.
Expatriates with No Home Pensions: Many expats come from countries where pensions are either non-existent or not portable. For them, the UAE scheme might be their main retirement savings. This underscores the importance of decumulation strategies. HAYAH’s role will be crucial in advising such individuals when they near retirement. For example, HAYAH could offer a product where the retiree gives their lump sum to HAYAH in exchange for a guaranteed monthly income for life (annuity). This shifts longevity risk to the insurer – something very valuable if the person doesn’t have a fallback. HAYAH’s financial strength and life insurance expertise position it well to underwrite such annuities. Alternatively, HAYAH could manage a drawdown account where the retiree keeps the money invested and withdraws a recommended amount each year (say 4% of the balance) to make it last 20-30 years. These options can be presented in easy-to-understand terms on the platform or via seminars.
Community and Family Considerations: In many cases, expatriates come from cultures where taking care of elders is a family duty. By building their own retirement fund, expats not only relieve potential future burden on their extended family but might also be able to support aging parents back home. It all ties into holistic financial well-being. HAYAH, through its education efforts, might encourage expats to think about goals like “supporting family” and show how consistent saving helps achieve that. Moreover, since expatriates often don’t get government social security in the UAE, this scheme, with HAYAH’s enhancements, effectively becomes their personal social security. It provides not just old-age savings, but with life and disability cover, a form of social insurance. Knowing that they have life cover means an expat can, for example, feel more comfortable that if they pass, their family can pay off a home loan or education loan with the insurance payout. HAYAH’s decumulation and protection strategies thus give expatriates and their families global financial resilience.
Case Study – Bringing it Together: To illustrate: Priya, an expat from India, works in Dubai from age 30 to 45. Under the new system, her employer contributes to HAYAH’s pension plan and she adds some voluntary savings. At 45, she decides to move to Canada. She has two options: withdraw her UAE savings (which have grown nicely) or leave them. She consults HAYAH’s advisor and decides to leave the money invested in a stable income fund. At 60, she’s settled in Canada and ready to retire. Her UAE pension has continued to grow, and now HAYAH helps her convert it to an annuity that pays her a monthly amount in CAD, supplementing her Canadian savings. Additionally, back when she was 35, she had a health scare; luckily, HAYAH’s critical illness coverage (part of her group policy) paid out a lump sum that covered her treatment, so she didn’t have to dip into her savings. This story shows how across the expat journey, the combination of savings, growth, protection, and flexible access provided by HAYAH’s solutions significantly enhanced Priya’s financial security.
In summary, for expatriates the shift to a funded pension scheme is a game-changer. It means real ownership of retirement savings, greater security (protected from employer default), and the potential for growth. It also internationalizes their retirement strategy – no matter where they go next, their UAE savings can remain working for them. HAYAH’s life and disability insurance ensures that even premature death or disability doesn’t derail their financial plan, which is particularly comforting if their families depend on them. By offering expert guidance on accumulation and decumulation, HAYAH effectively becomes a lifelong financial partner to expatriate employees, not just while they’re working in the UAE but beyond. This level of support and strategy was unheard of in the gratuity era; it’s a significant leap forward in providing expatriates the peace of mind and financial empowerment they deserve for contributing so much to the UAE’s economy.
Sources:
UAE Government Portal – Employees are entitled to the full amount of contributions and returns within 14 days of termination, and may continue investing in the scheme afterward
UAE Government Portal – Employees can withdraw voluntary contributions and returns at any time during employment, per fund manager terms
Additiv Press Release – New regulations (Nov 2023) allow alternative EoSB schemes, enabling employers to fund benefits; HAYAH’s platform offers flexibility between traditional and Shariah funds for employees
International Adviser – HAYAH received SCA licence to manage corporate pensions, ensuring regulatory compliance and setting stage for comprehensive services for all (including expats)
Additiv Press Release – HAYAH to expand as full-service digital wealth manager, incorporating asset and wealth management offerings – implies decumulation strategies forthcoming
HAYAH Insurance Profile – HAYAH offers the only workplace savings product approved federally, serving over 300,000 employees (many of whom are expats), demonstrating experience in diverse needs
Simmons & Simmons – The Savings Scheme is open to all private sector companies (except DIFC/ADGM), meaning expatriates across mainland and free zones can benefit
International Adviser – Adil Saghir of HAYAH: the initiative assists employees across UAE (mainland and Free Zone) in planning for their future, ensuring financial security for all