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GPSSA provides pivotal information on the UAE Pension Law in order to encourage Emiratis to receive higher insurance benefits

22 May 2023

GPSSA provides pivotal information on the UAE Pension Law in order to encourage Emiratis to receive higher insurance benefits

Abu Dhabi, 22nd May 2023: Do you feel that taking the decision to retire after working for 20 years is a sufficient time-period to obtain a beneficial insurance scheme for you and for your family? The General Pension and Social Security Authority (GPSSA) answers that question by providing pivotal information on insurance benefits and years of employment, as per the UAE Pension Law.

The response in short is simple; the less time spent working, the more an insured individual is prone to losing various insurance benefits, such as not receiving their aspired retirement pension. To further rectify, a retirement pension is granted to government sector employees based on the average contribution calculation salary for the last three years of service, while in the private sector it is calculated for the last five years of service or on the entire contribution period, if that period is less than five years. Said that, if an insured spends 20 years in service, he/she receives a pension at the rate of 70 per cent of the average contribution calculation salary, noting that a 20-year service period provides minimal insurance limits, which the GPSSA does “not” advise an individual to opt for.

As part of the ‘Get Ready - Proactive Financial Planning’ campaign launched by the GPSSA till 30th July 2023 to highlight the importance of preparing oneself in advance of a retirement, the GPSSA explains the fact that an insured’s decision to continue working beyond a period of 20 years results in “an increase in pension by two per cent for each additional year spent working” – which is an added value for both the insured and his/her family members.

Additionally, working for more than 20 years qualifies an insured person to purchase a legal service period, with the law permitting males to purchase from one to five years, while females are granted one to ten years; this is then added to the insured’s service years, thereby improving the pension percentage altogether, upon retirement. 
Continuing to work beyond those years results in saving the purchase cost, especially with the possibility of an increase in the insured’s salary, which would evidently result in an increase in the contribution calculation salary and in receiving more benefits upon retirement.

It is worth noting that working for a period 25 years in the government sector grants an insured individual the right to combine his/her pension and salary once they return back to work or take on a new job. Insured females may obtain the maximum retirement pension at 100 per cent of the average contribution account salary if they decide to retire after 25 years of employment, enjoying a legal purchase period of ten years, while males are required to work for a minimum period of 30 years in order to receive their maximum pension entitlements, with a five-year nominal service purchase period.

Those who work for 35 years and beyond, receive a maximum pension rate at 100 per cent of the average contribution account salary, in addition to a reward worth three pension account salaries for every year spent working after those years.



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