More companies in the Middle East are providing end-of-service benefits (ESB) to employees as countries move to make the gratuity payment model mandatory, according to a new survey by global advisory company WTW and professional services provider Equiom.
About 78 per cent of companies polled in the survey now pay ESB to staff, saying it was required by law in their countries of operation.
Companies that do not yet provide ESB said it was either not mandatory or they provided retirement and savings benefits in lieu of the payment.
“Ninety per cent of companies provide employees with ESB upon termination, while 10 per cent said they provide the benefit at more frequent intervals, for instance, annually,” WTW said.
The survey polled 121 multinational and domestic organisations in the oil and gas, banking and finance, manufacturing, and pharmaceuticals sectors.
End-of-service gratuities are lump-sum payments that all employed residents are entitled to after completing at least one year of service. Gratuity payments are covered by UAE labour law and the sum depends on an employee’s length of service and basic salary.
Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, launched a new savings pension plan for non-Emirati employees working in the Dubai government, which took effect on July 1, with the scope of expanding it into the private sector at a later date.
Foreign employees working in Dubai’s public sector are enrolled in the pension scheme by default. The employer will contribute the total end-of-service gratuity to the plan from the date of joining, without including the financial dues for previous years of service.
On average, 45 per cent of companies in the Middle East expect employees to stay for five to 10 years, while 23 per cent expect them to stay for 10 years or longer, the WTW survey found.
“The implications of longer expected future service combined with higher inflation and rising salary costs is likely to signify a sharp increase in future ESB liabilities,” according to WTW.
About 66 per cent of companies in the region provide enhanced ESB to all employees, WTW said.
A minority of companies only offer enhanced ESB to specific categories of employees, such as local non-nationals, international assignees and top management.
Forty-seven per cent of companies cited “industry best practice” as the most common reason for enhancing benefits this year, followed by 44 per cent that chose “retention of key talent” and 38 per cent that highlighted “local best practice”.
Companies provide enhanced ESB in a variety of situations: 84 per cent offer it when an employee retires, 81 per cent when staff are made redundant or when a worker dies, 63 per cent for resignations and 44 per cent during termination, the survey said.
Companies that provide enhanced ESB through the defined benefit formula most commonly use an employee’s length of service to determine the pay out, according to the survey. Other factors include job grade, equalisation of benefits between countries and early retirement.
Offering a separate defined contribution (DC) pension or long-term savings plan remains the most popular way of enhancing ESB.
About 24 per cent of companies in the region offer a DC retirement or long-term savings plan to their employees.
Long-term savings or retirement plans are most frequently offered in Egypt, Qatar, Kuwait, the UAE and Turkey, according to WTW.
The Dubai International Financial Centre was the first entity in the UAE to set up a new gratuity system when it introduced the DIFC Employee Workplace Savings (Dews) plan in February 2020, offering ESB to people working within the financial centre.
The scheme allows participants to choose a plan that is in line with the type of investment risk they are willing to take.
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How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
OIL PLEDGE
At the start of Russia's invasion, IEA member countries held 1.5 billion barrels in public reserves and about 575 million barrels under obligations with industry, according to the agency's website. The two collective actions of the IEA this year of 62.7 million barrels, which was agreed on March 1, and this week's 120 million barrels amount to 9 per cent of total emergency reserves, it added.
The 12 Syrian entities delisted by UK
Ministry of Interior
Ministry of Defence
General Intelligence Directorate
Air Force Intelligence Agency
Political Security Directorate
Syrian National Security Bureau
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Army Supply Bureau
General Organisation of Radio and TV
Al Watan newspaper
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Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
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Teaching your child to save
Pre-school (three - five years)
You can’t yet talk about investing or borrowing, but introduce a “classic” money bank and start putting gifts and allowances away. When the child wants a specific toy, have them save for it and help them track their progress.
Early childhood (six - eight years)
Replace the money bank with three jars labelled ‘saving’, ‘spending’ and ‘sharing’. Have the child divide their allowance into the three jars each week and explain their choices in splitting their pocket money. A guide could be 25 per cent saving, 50 per cent spending, 25 per cent for charity and gift-giving.
Middle childhood (nine - 11 years)
Open a bank savings account and help your child establish a budget and set a savings goal. Introduce the notion of ‘paying yourself first’ by putting away savings as soon as your allowance is paid.
Young teens (12 - 14 years)
Change your child’s allowance from weekly to monthly and help them pinpoint long-range goals such as a trip, so they can start longer-term saving and find new ways to increase their saving.
Teenage (15 - 18 years)
Discuss mutual expectations about university costs and identify what they can help fund and set goals. Don’t pay for everything, so they can experience the pride of contributing.
Young adulthood (19 - 22 years)
Discuss post-graduation plans and future life goals, quantify expenses such as first apartment, work wardrobe, holidays and help them continue to save towards these goals.
* JP Morgan Private Bank
Safety 'top priority' for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company's hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world's largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed [...] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
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Tests 27, Wickets 87, Average 37.59, Best 5-40
ODIs 53, Wickets 75, Average 33.44, Best 6-55
T20Is 10, Wickets 7, Average 41.14, Best 2-12
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
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Rating: 2/5
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
