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Fri 8 May 2020 02:43 PM

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Over 1,000 firms sign up for DIFC's pension-style savings scheme

Over 16,000 employees have been signed up and can now access their DEWS member portal to view and manage their contributions

Over 1,000 firms sign up for DIFC's pension-style savings scheme

Under the DIFC Employment Law, eligible employers that fail to comply with the deadline could attract a financial penalty of $2,000 per employee per breach.

A total of 1,100 firms have signed up for the Dubai International Financial Centre’s (DIFC) pension-style savings scheme for employees.

The firms, all based in the Dubai financial centre, met an April enrolment deadline for DIFC Employee Workplace Solutions (DEWS), according to Zurich Workplace Solutions (ZWS), a subsidiary of Zurich International Life Limited and scheme administrator.

The number of firms that have signed up represents 85% of all eligible DIFC organisations.

Of the 1,100 enrolled, 750 have made the gratuity contributions for their employees into the plan, with the remaining due to complete the requirements shortly.

Over 16,000 employees have been signed up and can now access their DEWS member portal to view and manage their contributions.

Launched in August last year, the scheme offers a low-cost investment platform for receiving and managing mandatory end-of-service contributions on behalf of employees, similar to the pension system operated in the United Kingdom.

Employees can also add any voluntary savings, including cash or cash equivalent options for those who do not want to take investment risks with their contributions.

The introduction of the new scheme will allow companies based in DIFC to know exactly what their liabilities to employees are, without any liability once paid.

In addition, employees will have secure benefits, irrespective of an employer going out of business, while having the option to earn a return on an employer’s monthly contributions and to make their own contributions in a very cost-effective and simple way.

Penalty for employers

Employers in DIFC have the option to opt out of the DEWS scheme in limited circumstances, provided that they have a qualifying alternative scheme certificate by the DIFC Registrar of Companies.

Under the DIFC Employment Law, eligible employers that fail to comply with the deadline could attract a financial penalty of $2,000 per employee per breach.

The original deadline of March 31 for enrolment and 21st April for contribution was reviewed by DIFC Authority (DIFCA) and the DEWS Supervisory Board in context of Covid-19 developments and its resulting impact on businesses, and an extension was granted to employers.

Even with the extension, there was a significant last minute rush for enrolment with over 200 companies enroling in the last week of April, and close to 350 companies missing the contribution deadline.

In the run up to the deadline the support team from Zurich Workplace Solutions (ZWS) has been assisting a number of organisations by explaining the changes to the law, the steps to ensuring compliance and completing the enrolment formalities.

“We have been working closely with organisations and helping them with enrolment and contribution payments. In the last week alone, the ZWS team has responded to over 2,500 calls and live chats, and in excess of 4,000 emails,” said Reena Vivek, senior executive officer of Zurich Workplace Solutions.

“We have been coordinating closely with the DIFC and the Trustees (Equiom), to help smaller companies who have made significant efforts to comply but have been unable to enrol in time due to factors outside their control. A number of these organisations will complete the remaining formalities in the next few days.”

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