UAE expats should start retirement planning today
DUBAI 17 February 2019: As the UAE continues to set standards against the highest global benchmarks in every field, it should be no surprise that the trend is continuing into employee wellness generally and the end of service benefits scene specifically.
That trend continues into the countdown to the first edition of the Workers Incentives & End of Service Benefits Conference under the patronage of the Federal Authority for Government Human Resources and organized by Mondial (Dubai), a leading financial advisory firm in the UAE, on February 26th at Intercontinental Festival City, Dubai.
At the global, supranational, level the likes the United Nations and World Bank have been clear in their objectives to reduce global poverty. Under this banner, the role of Severance Pay Schemes (or End of Service Benefits Schemes as they are called in the UAE) is a critical backbone to retirement planning generally. A recent Quilters Report suggests that in the UAE 6 out of 10 employees are reliant on their EOSB gratuity to fund retirement.
According to Mercer, the gap between the value of pension benefits around the world and what pensioners really need to live a decent life is $70 trillion, more than the GDP of the 10 largest economies in the world. “A financial gap of this kind will lead to a ‘black swan’ situation, which indicates a possible global financial crisis,” says Mercer. Something clearly needs to be done at both a global level as well as a local level.
At the UAE economy level, the thought of all 7 million expatriates funding schemes is certain to bolster the economy. As Kelleher says: “For the financial services sector- everybody funding something – will reduce monies being invested outside the country, and provide a significant diversification within financial services.” Insurance/banking/asset management might all feature amongst the new winners.
Amy Curlee, WIEOSB’s Senior Consultant Mondial (Dubai) the said: “The whole field of employee benefits needs to be thrown into flux to attract a different kind of employee for the 4th Industrial Revolution. What worked for the employees who constructed the buildings in the first place will not work for the employees who will work on the ideas, the technology, and the innovation which now needs to come out of those buildings.”