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NCC seeks pension rule changes

posted on 30/03/2004: 3377 views

Rules governing pension plans and end-of-service benefits for UAE nationals in the private sector are set to be relaxed to encourage more nationals to find jobs with non-government organisations. The National Consultative Council (NCC) yesterday discussed the differences in federal and local laws governing terms and conditions for pensions and end-of-service benefits for UAE nationals. The council is to ask the government to ease its pension and end-of-service benefit policy for the private sector.

The council unanimously agreed to approach the Abu Dhabi Retirement, Pension and Benefits Fund to remove any difference between its regulations and the Federal Law No. 2 for 2000 to bring it into line.

The council meeting, chaired by Speaker Abdullah Mohammed Al Masaood, regretted that the contribution made by private firms towards pensions and end-of-service benefits for national employees was considered too high, making them think twice about recruiting nationals. Member Ghaith bin Hammel Al Ghaith referred to the difference in the contributions made by the private sector as stipulated in the federal law and that made mandatory by Abu Dhabi Retirement, Pension and Benefits Fund.

The council also reviewed a comprehensive report on the pension issue, prepared by a housing committee following an in-depth meeting with the Fund Managing Director and other senior officials. The council also noted a big difference in the pensions to beneficiaries as stipulated in the federal law and in those laid down in fund regulations.

The council further noted that though the private sector was asked to contribute more by the Abu Dhabi fund than by the federal law, the pension provided was far lower than the provision under the federal law. For instance, there is a compensation package of Dh150,000 in the event of death or disability under federal law. The same compensation is Dh75,000 under the fund regulations.

The age limit for retirement in the federal law is 55 years for men and 50 years for women who have served for 15 years. Under the local law, the retirement age limit is 60 for men and 55 for women with 10 years service.

Another difference, the house was told, was the calculation of pension. Under the federal law, the pension is calculated at 60 per cent of the salary with a 15-year service, while under the local law it is calculated at 48 per cent of the salary of the last three years of the service. (The Gulf News)


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