UAE announces New Pension Laws: Here’s what the new laws state

UAE – Pension reforms in the United Arab Emirates are not as simple as in other countries. There are several complexities in the pension laws of the UAE. Recently the Gulf has introduced some new pension laws.

According to the new laws, all the government and private hiring people are subjected to pay an amount of 26% from their income as pension.

The new rulings come under the Abu Dhabi Decree Law No.(57) 2023 and state that all institutions that have hired citizens from the last date of October 31 are to pay an additional amount.

UAE New Pension laws 2023

With the new reforms in place individuals and institutions have two choices now. The first choice is to pay 20% from their income for the month of October, November, December, and the rest 6% at the year end.

The second option for individuals is to start paying 26% initially from October 2023 and have it cut from salary.

The new legislation is aimed at enhancing the pension funds for employees and ensuring they live a good quality life after retirement. Before these reforms, institutions used to cut 5% from the salary for the accumulation of pensions. The firm contributed 5% for pensions while the employees contributed 15% from their salary.

The announcement also stated that the maximum contribution for government employees will be AED 100,000 while private employees will contribute to AED 70,000 only.

Moreover, the government stated that citizens of UAE who have already availed the end-of-service gratitude and are not eligible to apply for this new scheme.

The new law hopes to create a balance between the government and private firms and ensure the smooth and healthy contribution of pensions for employees.