MOHRE Consultation on new EOSB Gratuity Saving Scheme to end soon

Many companies and many employees have become aware of the new alternative End of Service Benefit (EOSB) saving scheme – and many of them have something to say.

It is therefore very commendable that MOHRE has been embarking on a large scale exercise to gather feedback on the new system far and wide.

Share your views with “Sharik”,  the UAE’s official feedback portal

For several months already the public has the opportunity to share their views on the new EOSB system with MOHRE, by heading to the UAE’s official feedback portal “Sharik” which can be accessed here

So – what is your view on the EOSB system? What aspects to you really like? What aspects do you think might need improvement?

Let us just pick three examples that have been causing discussion recently – we are sure that MOHRE will be interested in the public’s view on these points:

• Legacy EOS gratuity: Once a company switches to the new system, the EOSB gratuity that has been accrued up and until the point of switch-over is frozen, ie it does not increase further in the case of salary increments. Some employees have told us that this makes them worse off; some business leaders on the other hand have told us that this is great as the company saves money, and in any case, employees benefit overall as the new solution is superior in many aspects. What is your opinion on this point?

• Available funds: So far only CMA-approved & Mainland-domiciled funds are available for employees to invest in. What about other great funds, e.g. from the DIFC, or from abroad? We heard several views on this – some employees would like a broader choice of funds (particularly as today’s offering is still very limited); on the other hand some people voiced concern that employee funds might not be sufficiently protected, respectively be outside the control of the UAE authorities. What is your view?

• Capital guarantee funds for unskilled workers: Employees earning less than 4,000 AED/month can only invest in capital guarantee funds. On the one hand this is understandable, as financial literacy among unskilled workers is rare. On the other hand, it is clear that investment gains of capital guarantee funds are very modest, and often outpaced by the rate of inflation. In other words, unskilled workers may end up with less money, when purchasing power is taken into consideration. So: is this rule a good thing or not?

These are just three questions that are being hotly debated at the moment. And there are, of course, several more aspects of the new scheme where various stakeholders have different opinions.

Hurry up - MOHRE Consultation ends February 28

So, do you have a view on the above questions, or other aspects of the new system? Please make your voice heard – but do hurry up, as the consultation will officially close on February 28.

If you got something to say re. the new EOSB system - head over to Sharik to share your opinion with MOHRE, by close of next week.