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UAE’s pension authority clarifies rules, provisions related to addition of previous service periods

Last Updated 26/08/2024 08:45
UAE’s pension authority clarifies rules, provisions related to addition of previous service periods

Abu Dhabi, 02 August 2022:  Merging previous service periods ensures an insured individual’s overall service period is continuous, which increases their chances of obtaining a retirement pension, the General Pension and Social Security Authority (GPSSA) said today.


In a statement Hanan Al-Sahlawi, Executive Director of the Pensions Sector said
that an Emirati insurer who is employed and reside in the UAE can opt to add a previous service period to a subsequent service period before the end of their end-of-service, as per the provisions of the law. 


Emirati citizens who have previously worked in the Kuwait office or in any entity prior to the establishment of the Union and during the time when oil was discovered in the 60’s are also able to avail both service periods, based on GPSSA’s Board of Directors decisions.


The conditions for adding service periods must be met by the insured, some of which include submitting a written request to the employer to add the period before the end of his/her service, and to ensure the service period he/she wants to add has not ended for any reason resulting in complete pension and/or end-of-service deprivation. 


Freelance/temporary jobs, daily wage employment and training durations before assuming a job are not part of merging service period conditions. 


Insured individuals who have obtained the UAE passport later have the right to add previous service periods given that those service periods have not ended up in a termination, disciplinary decision, or a court ruling.


Based on a decision taken by GPSSA’s Board of Directors No. 1 of 2021, which was announced in early 2022, the insured is allowed to pay in installments the costs for adding the entire service period without being required to refund the end-of-service all in one payment, as done in the past.


The insured can choose to pay the cost of adding his/her service periods all at once or via monthly installments that are not not less than a quarter of his/her salary, given that the installment period does not exceed four years or the end of the insured’s service period, whichever comes first. 


Insured individuals who are eligible to adding their service periods may apply for a new application given that the first application is settled by calculating the merged service periods in proportion to the amounts actually paid, provided that the new service period is re-calculated on the additional costs of his/her contribution salary on the date of submitting the new application.


The joining request is canceled if the insured individual fails to pay two consecutive or alternating installments. The added period is calculated in proportion to the amounts paid by the current employer. In the event that the service of the insured ends without paying the full cost of the merge, the added period is calculated in proportion to the amounts actually paid.


In case the insured dies, if the value of what he/she has paid is less than 50%, the rest of this percentage is deducted from the shares of the beneficiaries.


The additional costs are calculated according to the following equation:


-Multiply the contribution account salary (on the date of submitting the additional request) by 20% by the service period to be included in months 
-Multiply the contribution calculation (on the date of submitting the additional request) by 20% (the full contribution percentage for the insured and the employer) by 60 (the service period to be added in months)


The cost of adding during this period is Dh240,000


Even if an insured individual’s previous employment in an entity was less than a year, those previous months are still useful for his/her pension and retirement entitlement, since they can add those days/months to their new entity, who may even decide to bear the remainder of the joining cost after the insured returns the end-of-service gratuity to the GPSSA.
 

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