Articles

Abu Dhabi, 1 September 2025: In a nation that consistently looks to the future, ensuring financial security for its insured employees and retirees is paramount. The General Pension and Social Security Authority (GPSSA) stands at the forefront of this commitment, consistently working to maintain and enhance the long-term financial well-being of UAE employees, pensioners, and beneficiaries. Yet, despite robust systems and clear regulations, a landscape of misconceptions often clouds public understanding regarding pensions and the services provided to pensioners, contributors and their beneficiaries. These misconceptions, if left unaddressed, can lead individuals to make decisions that inadvertently undermine their post-retirement stability.

GPSSA is proactively addressing this challenge, emphasizing that enhanced understanding of the insured and retirees’ rights and obligations under the UAE pension law is not merely about understanding the law, but about empowering individuals to plan for a secure and comfortable future.

Separating Facts from Misconceptions

One of the most enduring misconceptions revolves around the distribution of a woman’s pension after her passing. A widespread belief suggests that it ceases to be distributed to her family. GPSSA clarifies that this is incorrect. Just as with male pensioners, a woman’s pension is passed on to her eligible dependents, ensuring continued support for her loved ones. It is important to note, however, that if both spouses are receiving pensions from GPSSA, beneficiaries will be entitled only to the higher of the two pensions, as combining both is not permitted under the law.

Another common assumption positions pensions as a form of traditional inheritance, to be divided equally among heirs. This perspective overlooks the specific legal framework governing pension distribution. Pensions are not considered shar’i inheritance; their allocation is strictly governed by eligibility conditions defined in Federal Law No. 7 of 1999. For instance, a son is entitled to his share of the pension only until he reaches the age of 21, while a daughter continues to receive her share beyond that age unless she marries or becomes employed. Because pensions are not inheritance, a daughter’s entitlement is equal to that of her brother, in line with the principle of support based on need rather than inheritance rights.

Navigating Entitlements: Pension vs. Gratuity

Another frequent source of confusion concerns the belief that insured members can choose between receiving a pension or an end-of-service gratuity. In reality, entitlement is determined by the length of service and, in some cases, age. For example, an employee who has served for 19 years and 11 months would be entitled to an end-of-service gratuity. However, extending service by just one additional day would place them in the pension category, since the law counts partial months as full months. This distinction underscores how even a single day can alter retirement benefits significantly.

Similarly, the idea that retirees automatically receive both a pension and a gratuity at the end of their service is a misconception. In most cases, insured members are entitled to one or the other. The only scenario in which both are granted is when service exceeds 35 years. In such cases, the insured member receives their pension along with a gratuity equivalent to three months of pensionable salary for each year served beyond the 35-year mark – a recognition of extended service and dedication.

Understanding Your Pension Value

Another common misunderstanding is the belief that the pension will match the last salary received during employment. GPSSA clarifies that this is inaccurate. Pensions are calculated through a clear process: first, identifying the salary on which contributions were based; second, calculating the average of this salary; and finally, applying the percentage corresponding to the years of service. For example, 15 years of service entitles the insured member to 60% of the average salary used for contributions, with an additional 2% added for each year beyond 15. This structured method ensures fairness and consistency in pension distribution.

Empowering Your Future

These clarifications from GPSSA provide vital insights intended to protect insured members from making ill-informed decisions – such as resigning prematurely in pursuit of a gratuity – that could negatively impact their long-term financial security. GPSSA is committed to providing comprehensive awareness and support to ensure that all insured individuals receive accurate, reliable information, empowering them to plan effectively for their retirement.