Retirement no longer compulsory for Emiratis after 25 years of service

Abu Dhabi’s Retirement Pensions and Benefits Fund has announced that retirement is no longer compulsory for citizens in the government, semi-government and private sectors who have completed 25 years of work.

The announcement comes following the unveiling of a major stimulus package by the emirate’s crown prince on Tuesday, including Dhs50bn ($13.61bn) worth of measures to spur growth in the emirate and make it easier to do business, create jobs and boost tourism.

Read: Abu Dhabi crown prince approves Dhs50bn in economic stimulus

The fund said Emiratis can continue to work after 25 years if they wish to join a new employer but they will still receive pension payments once they submit their resignation.

“This decision grants long-term insureds the freedom to continue working for a new employer while maintaining their insurance rights and years of service,” the fund said, according to state news agency WAM.

UAE citizens are entitled to retire after reaching the age of 49 or 20 years of work.

Under the new system, those who have worked more than 25 years will receive payments if they join a new company within six months of resigning.

However, there is still a retirement limit of 60 for men and 55 for women.

“If the insured is enrolled in an employer subject to the provisions of the Abu Dhabi Local Retirement Scheme and has decided to retire after years of employment in the new entity, a pension of 80 per cent of the salary of the contribution account shall be paid and a bonus for the years over 25 years of service shall be provided,” the pension fund said.

It is hoped allowing Emiratis to work for longer will increase the sustainability of the pension system and allow the country to benefit from a more experienced work force.

For government workers the monthly pension payment is based on their average salary over the last three years, or the worker’s prescription period.

In the private sector it is the average salary over the last five years, or the worker’s prescription period.

Retired workers will receive the equivalent of a month’s salary in each pension payment for the first five years, two-month’s for the second five years and three-month’s for the next five years and thereafter.

The number of pensioners in Abu Dhabi reached 88,202 by the end of the first quarter of 2018. There were also 6,976 retirees and 9,380 beneficiaries recorded during the first three months of the year.

The UAE economy is expected to recover gradually this year without suffering a significant blow to growth from the introduction of a 5 per cent value-added tax in January.