Limited audience news, but useful to know for general knowledge

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Limited audience news, but useful to know for general knowledge

The maximum salary for Emiratis to take into account of the pension for UAE citizens in the private sector has been increased from AED50,000 to AED70,000.

The General Pension and Social Security Authority (GPSSA) announced the new Federal Pensions and Social Security Law No. 57 of 2023, increasing the maximum contributory salary for Emiratis working in the private sector from AED50,000 to AED70,000.

The new law aims to improve GPSSA’s policies and operating system, ensuring the efficiency and sustainability of pension financial resources.

The new Federal Law will apply to Emirati workers who are new to the labor market from the date of its publication in organizations participating in GPSSA. Participants who are current employees will continue to be subject to the provisions of the current Federal Law No. 7 of 1999 on pensions and social security.

The monthly contribution for the insured will be 26% of total wages: the insured person pays 11%, the employer – 15%. The government will match the 2.5% private sector employer share for working Emirati citizens whose contribution account salary is less than AED20,000 to encourage the recruitment of UAE nationals into the private sector.

The minimum age of an insured person who gets the right to an old-age pension is 55 years, and the minimum length of service is 30 years. In support of the vital role of the family in society, the new Law provides working mothers with more flexibility and benefits.

The law also provides that payment of pension shall be suspended if the pensioner takes up a new job covered by the provisions of the new law in exchange for compensation (whether a monthly salary, lump sum payment or gratuity) if that compensation is equal to or greater than the pension amount. If the new salary is less than the pension, they will be paid the difference. The pension will be returned upon completion of service in accordance with the provisions of the law.

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