Pension and GPSSA Policy

This policy defines criteria for businesses to define Pension & GPSSA Policy and aims to ensure that eligible emoployees are covered and communicated about the Pension Scheme. GPSSA (General Pension and Social Security Authority) is mandated to apply pension and retirement benefits for female and male Emiratis aged 18 to 60

This policy template is available for download in Word format.

Pension & GPSSA Policy

Objective

The Pension and GPSSA Policy aims to ensure that eligible employees are covered under General Pensions within the organisation. The Policy aims to communicate with employees regarding the Pension scheme that is aligned with the UAE's General Pension and Social Security Authority.

Scope & Applicability

• The Pension and GPSSA Policy applies only to EMIRATI employees working within the organisation.
• Only UAE national employees who hold a 'family book' are entitled to be enrolled in the GPSSA pension scheme and are not entitled to receive the end-of-service gratuity.
• Those UAE nationals who are ineligible for the above registration are entitled to receive an End of Service Gratuity payment.
• The UAE's pension law provisions are subject to employees in the Government sector, including the federal government, local governments (except Abu Dhabi and Sharjah), public companies and banks affiliated with the federal government.
• The Emirate of Abu Dhabi is managed by Abu Dhabi Retirement Pension & Benefits Fund (ADRPBF).
• The Pension and GPSSA Policy of the UAE serves as a social security thread for Emirati nationals working in private and public sector organisations.
• The Pension and GPSSA Policy aims to ensure the organisation's commitment towards the social security of Emirati nationals working in the public or private sector.

Policy / Process

Policy Definition

The Pension and GPSSA Policy was introduced in 1999 within the UAE via the establishment of GPSSA under Federal Law No. 6 of 1999 to provide pensions & Social security to the citizens of UAE. GPSSA is entrusted with providing pension-related services to citizens employed in federal government entities and the private sector across all of the Emirates. The Social Security cover is offered for all working Emiratis against old age and disability/death due to work-related injury.

GPSSA Establishment and its role

• GPSSA is an independent Federal authority that enjoys administrative and financial independent status.
• GPSSA takes appropriate decisions to bring about a balance between investments and resources via taking appropriate decisions to serve the interests of retired citizens and families, keeping in mind the rights of future generations.

Eligibility for Pension

• The pension scheme by GPSSA covers ageing, disability, death, work and occupational illnesses. Additionally, as per Article 16 of the federal pension law, employees are entitled to a pension if they complete 20 years of service and attain at least 50 years of age.
• The amount of pension increases by 2 per cent for every year they work after 20 years of service until they complete 35 years of service
• When employees complete 35 years of service, they qualify for a pension equal to their salary.
• When employees exceed 35 years of service, then they shall get a pension equal to a salary of three months for each year.
• Pension for GCC Nationals: GCC citizens who work in another GCC country have the right to enjoy a pension in the same way they would enjoy if working in their own home country. They are eligible to receive a pension as per the respective law of their own country.

The Emirate of Abu Dhabi is managed by Abu Dhabi Retirement Pension & Benefits Fund (ADRPBF). The Pension and GPSSA Policy of the UAE serves as a social security thread for Emirati nationals working in private and public sector organisations. The Pension and GPSSA Policy aims to ensure the organisation's commitment towards the social security of Emirati nationals working in the public or private sector.

Procedures

The Pension and GPSSA Policy states the procedure by which eligible employees shall be registered to the Pension scheme.

Eligible employees registration

All the eligible UAE National employees, i.e. Emiratis, shall be registered with the GPSSA within one month from the date of joining an organisation.

Documents Required for registration in GPSSA

The following documents shall be required for submission to GPSSA and subsequent registration with GPSSA :

• Copy of Passport
• Copy of Emirates ID card
• Copy of Family Book ID
• Birth Certificate Copy or Age Estimation Document
• 3 filled copies of the "Service Start Form" of the insured
• Appointment Letter or employment contract (government sector)
• Original copy of employment contract attested by the Ministry of Labor for citizens working in the private sector.
• Photocopy of a medical examination upon appointment.
• Issuance of Insurance Number: The insurance number is issued to eligible UAE nationals upon completion of registration. The employees should confirm with their employer that registration is completed.

Age Specification

For Registration in GPSSA, the minimum age requirement is 18 years, and the maximum age is 60 years, i.e., employees should not be more than 60 years.

Employee & Employer Contribution in GPSSA (in Percentage)

In the government sector, the employee and employer contribution in Pension is as follows:

• Employer Contribution: 15% of basic monthly salary + social allowance of a national, allowance for children, allowance for the cost of living and allowance for accommodation.
• Employee Contribution: 5% of basic monthly salary + social allowance of a national, allowance for children, allowance for the cost of living and allowance for accommodation

In the private sector, the employee and employer contribution in Pension is as follows:

• Employer Contribution: 12.5% of the contractual salary stipulated in the employment contract, including basic salary and allowances (to be paid on a regular and monthly basis).
• Employee Contribution: 5% of the contractual salary stipulated in the employment contract, including basic salary and allowances (to be paid on a regular and monthly basis).
• Government Contribution: 2.5% contractual salary stipulated in the employment contract, including basic salary and allowances (to be paid on a regular and monthly basis).
• GPSSA Base Amount Limit (Minimum): Minimum base amount for calculating GPSSA is 1,000 AED.
• GPSSA Base Amount Limit (Maximum): Maximum base amount for calculating GPSSA is 50,000 AED.
• The basis for calculating social contributions in the private sector: The salary for the month of January each year is the basis of the social contribution calculation for the remaining months (i.e. February to December).
• Salary for the month of January shall be the basis of the Base amount on which the social security value is calculated. Salary Increments or Salary Deductions post the month of January shall not be considered, i.e. salary for the month of January is the only salary fixed as the Base pay from which the employee and employer contributions are calculated.
• If employees join post the month of January, then the salary calculated for social contribution shall be of the month in which employees join the organisation until December.
• The contribution amount is reassessed in January of every year.

GPSSA transfers

• The GPSSA transfers shall be via UAEFTS. The employer's share of the contribution and the employee/s share of the contribution shall be done via UAEFTS to GPSSA.
• GPSSA contributions are made similarly to staff salary distribution through the organisation's corresponding bank.
• The cut-off date for submission to GPSSA is the 27th of every month, i.e., the contributions for the month of January should be submitted by the 27th of January.

Responsibility of HR department

• The Manager HR should keep records of the employees eligible for social contributions.
• The Manager HR should keep the records of the employees of GCC nationals.
• Payments to GPSSA should be processed through the organization’s corresponding bank orExchange Houses.
• The database of requisite employees should be reviewed on a monthly and annual basis to ensure that all eligible employees are paid.

Non-compliance and consequences

The organization shall take necessary disciplinary actions in non-compliance by the requisite parties to collect the records of eligible employees for registration with GPSSA. The Disciplinary action includes demotion, reprimand, suspension or termination, and detraction of benefits for a definite or indefinite time. An investigation committee shall be formulated for an unbiased investigation of the complaint submitted for non-compliance towards GPSSA policy.

Special Circumstances and Exceptions

In the event the requisite HR employee is unable to formulate the data and/or any employees contribution was unable to be made on a monthly basis and/or the contribution is missed out due to software and/or technical challenges in the GPSSA system and/or challenges in the bank system, then no disciplinary action shall be undertaken against the HR employee.