By Sam Bridge
Dubai International Financial Centre has announced the final details ahead of the launch of its new DIFC Employee Workplace Savings Plan
Dubai International Financial Centre (DIFC) on Tuesday announced the final details ahead of the launch of its new DIFC Employee Workplace Savings Plan (DEWS).
DEWS is a new end-of-service benefits plan which will be introduced within the DIFC from February 1 to restructure the current defined benefit end of service gratuity scheme into a funded and professionally managed, defined contribution savings plan.
It aims to secure the financial future of more than 24,000 employees based at the DIFC, a statement said.
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.
It 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.
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, the statement said.
Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and president of Dubai International Financial Centre said: “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.”
Essa Kazim, governor of DIFC added: “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.”
DIFC said 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. 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 also bring an independent, tried and tested investment process to the master trustee of DEWS.
DIFC-based employers will have until March 31 to enroll into a Qualifying Scheme, which includes the best-in-class default Qualifying Scheme, DEWS.
Employees will only be subject to an annual management charge ranging between 1.26 to 1.33 percent, 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.
Employers are required to make a minimum contribution of 5.83 percent of an employee’s basic salary with less than five years’ service. The minimum contribution increases to 8.33 percent 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 all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.