The revisions are designed to bolster a retirement system that is both competitive and sustainable, fostering equality among UAE nationals in both sectors, Abu Dhabi Media Office said on Friday.
The amendments will establish an adaptable retirement scheme that resonates with individuals' career goals and requirements, granting them improved retirement benefits after fulfilling the maximum tenure of service, officials said.
One key change in the pension law involves raising the maximum pensionable amount to 100 per cent of the deductible salary once individuals complete the maximum years of service.
For up to 25 years of service, eligible citizens will receive a retirement pension amounting to 80 per cent of their salary, subject to deductions.
Following 25 years of service, individuals will have the choice to increase this percentage by an extra two per cent annually, to reach a maximum of 100 per cent of the deductible salary.
Previously, the pensionable amount was capped at 80 per cent of the deductible salary, even after individuals had reached the maximum years of service.
The revised law applies to all insured citizens and does not affect their current rights, the statement said.
The minimum retirement age had been set at 45 years, provided 25 years of service have been completed.
However, the retirement age will now gradually increase at a rate of six months every year until it reaches the new minimum retirement age of 55 years, the statement said.
The percentage of monthly retirement contributions has remained the same at 26 per cent of the deductible salary, with newly insured employees contributing 11 per cent and employers paying 15 per cent, according to the amended law.
The UAE retirement income system's ranking improved in the Mercer CFA Institute Global Pension Index released last month, placing 23rd among 47 countrieswith long-standing pension systems such as the US, Singapore and France.
The overall ranking reflects the “sound structure” the country has put in place for a funded pension system for Emiratis, with both the public and private sectors setting aside mandatory contributions during an employee’s tenure, according to the survey, which includes the UAE for a third consecutive year.