HR and Finance Managers: Is the EOSB Transition in Your 2027 Budget?
It's budget season again. Finance is collecting submissions, and every department, HR included, is being asked to put numbers against next year's plans and defend them. So before your 2027 budget is locked, here is a question worth asking: have you set aside anything for the move to the End of Service Benefit (EOSB) savings scheme?
What 2027 will (and won't) bring
The alternative EOSB savings scheme is still voluntary, and we don't expect it to become compulsory next year. A mandatory date may well be announced during 2027 (to kick in the year after), and for companies that need to educate management, brief employees, settle on a provider, pilot it and introduce it - that is closer than it sounds.
That is why we see 2027 as the year of preparation. Companies that start now can make their decisions calmly and on their own terms. Companies that wait for an official deadline will be making the same decisions under time pressure, at a moment when professional advisers and vendors will be extremely busy onboarding new clients.
Can you explain it to the CEO?
Picture a Monday morning. You step into the lift, coffee in hand, and your CEO steps in behind you. After a nod hello, she asks:
“I keep hearing about these new EOSB savings schemes. Do we have to do this? What does it mean for us?”
You have ten seconds before the doors open on your floor. Could you explain it to your CEO in that time? Leaders who have done their preparation will. Those who haven't will promise to “get back to you”, and the CEO will remember that.
This is not just an HR topic
The move to the EOSB savings scheme is easy to file under HR, but it is really a financial decision with an HR face. Contributions replace the accrual of a gratuity liability, which changes cash flow. Someone has to decide what happens to existing gratuity balances. And the choice of fund and risk profile will directly shape how much each employee walks away with at the end of their service.
In other words, these are decisions with far-reaching consequences for employees' financial outcomes. This means employees need to be part of the journey: informed, consulted and, in many cases, involved in the decision-making process.
Given all this, the move to the scheme quickly becomes complex. Besides, topics such as financial literacy, fund comparison and the selection of a fund manager are not typically core skills that a company has readily available. Many companies rightly decide that it is best to appoint professional advisers to help them on the journey.
What does “preparation” actually mean?
In practice, a good preparation programme contains at least four building blocks:
Market overview. Understand how the scheme works, who the licensed providers are, what funds they offer, what they charge and who stands behind them.
Management presentation. Give the CEO, CFO and board what they need to take informed decisions, including whether to wait for the mandatory date or enrol voluntarily earlier. This may include a training element for top management (and key HR and Finance teams) so that they are fully up to speed with the new system.
Employee briefing. Explain the scheme to your people before they hear about it elsewhere: what changes, what the risk profiles mean, and what the default option is.
Pilot (optional). For some companies, a small voluntary pilot with one entity or employee group is the best way to test payroll integration, data flows and employee reaction before a full roll-out.
Along the way, a handful of decisions will need to be made: how to treat legacy gratuity balances, whether to enrol early, which fund manager to choose, whether HR and payroll systems need upgrading, and how to communicate all of it. Each of these takes time, and most of them take some budget.
Why consider a professional adviser?
As mentioned earlier, many companies will want expert support for some or all of these steps, and for good reason. Because the choices affect employees' savings outcomes, this is not a task to be delegated to whoever happens to have spare capacity in the HR team. An independent, qualified adviser can shorten the learning curve, help avoid costly mistakes and give management confidence that the decisions are well founded.
It is worth checking who is actually authorised to give this kind of advice. GratuityAdviser is operated by Lux Actuaries Financial Consulting L.L.C., which holds a Category 5 (Financial Consultations and Introductions) licence from the UAE Capital Markets Authority (CMA) and is qualified and authorised to advise on exactly these matters. Details of our advisory services are here.
So, how much should you budget?
The honest answer is that it depends on your size, structure and ambitions. A group with several legal entities (some perhaps in free zones) and an existing corporate pension plan has more to work through than a single-entity company with a simple benefits package. That said, here is a practical starting point that Finance can work with:
Management education: AED 5,000–10,000, to get HR, Finance and senior management up to speed
Employee briefings: around AED 5,000, depending on company size
Professional advice: AED 10,000–15,000, for independent guidance on strategy, providers and decisions
For most medium-sized companies, a total of AED 20,000 to 30,000 should be enough to be fully tooled up for the EOSB transition: management informed, employees briefed and a clear strategy in hand. Larger or more complex organisations may need to go beyond that, but even they can use these figures as a baseline.
The takeaway
The EOSB savings scheme may not be compulsory in 2027, but it is likely to arrive sooner than many think. The companies that will handle it best are those that treat 2027 as a year of preparation: they will know the market, have their management and employees on board, and have taken their decisions with proper advice.
A modest line in next year's budget is a small price for that peace of mind. Put it in now, while the budget is still open.
For help preparing your organisation, or comparing and evaluating providers, please get in touch with us.
GratuityAdviser is operated by Lux Actuaries Financial Consulting L.L.C., which holds a Category 5 (Financial Consultations and Introductions) licence from the UAE Capital Markets Authority.
