How can Abu Dhabi financial institutions enter the UAE alternative end of service benefits market?

For Abu Dhabi banks, insurers and asset managers, the main way into the UAE alternative end of service benefits market is to offer an approved savings scheme as fund manager under the federal Savings Scheme. The scheme was established by Cabinet Resolution No. 96 of 2023 and is overseen by the Ministry of Human Resources and Emiratisation (MOHRE) and the Capital Market Authority (CMA, formerly the Securities and Commodities Authority). For an institution with an onshore licensed fund management entity, the path is well defined.

This article focuses on the onshore MOHRE and CMA route. The financial free zones run their own end of service frameworks.

Why now?

End of service benefits in the UAE are shifting from an unfunded liability sitting on the balance sheet of companies to a monthly contribution that is funded and invested. Employer participation in the federal Savings Scheme is currently voluntary, but even on a voluntary basis this gives fund managers long-term, recurring, AED-denominated inflows from the private sector workforce. Few product lines in the region offer that kind of predictable, long-horizon growth. The broader shift from an unfunded liability to a funded scheme is set out in our explainer on the alternative end of service benefits framework.

The market is also proving itself. Established Abu Dhabi names are already approved providers with employers actively registering today.

Who can become a fund manager?

The appendix to Cabinet Resolution 96 adds scheme-specific requirements on top of the CMA's existing fund and licensing rules. A fund manager needs:

• At least AED 1 billion in assets under management
• At least three years of experience managing investment funds
• Additional capital or financial solvency of at least 2.5 per cent of the fund's assets, up to a maximum of AED 50 million
• A AED 5 million letter of guarantee in favour of the CMA

Most established Abu Dhabi fund management entities, including those within banking and insurance groups, will meet these without difficulty, which makes the scheme a natural fit for them.

What routes are open to banks and insurers?

Banks and insurers have more than one way in, and the resolution itself creates several of them.

• As fund manager, through a group asset management entity. The fund manager must be licensed by the CMA to operate and manage investment funds and meet the thresholds above. Many banking and insurance groups already have an onshore asset management arm that can take on this role.
• As custodian. The resolution requires every scheme fund to appoint a custodian, which must be a local bank licensed by the Central Bank with capital of at least AED 3 billion. For qualifying banks, this is a role within someone else's scheme or their own group's.
• As insurer. Every fund manager must insure employer contributions and amounts due to members in full, so each scheme needs an insurance company. For insurers, that is a built-in role in every scheme in the market.

The rest of this article focuses on the fund manager route, which offers the fullest role in the market and the most direct relationship with employers and members.

What needs to be in place

1. Readiness and business case

Start by confirming that the existing licence covers the activity and that the thresholds above are met. Then work through Cabinet Resolution 96, its appendix and Ministerial Resolution No. 668 of 2023 in detail.

2. Fund design

The resolution sets out three types of option that every fund manager should offer:

• A capital guarantee portfolio. This is compulsory for unskilled workers, and it is where voluntary contributions go by default if the member doesn't choose
• Risk-based options across a range of risk and expected return
• Shariah-compliant options

Skilled workers must be able to choose from the full range, so both the fund and the member experience have to make real investment choice possible, not just offer a default.

3. Fee structure

Pricing will shape how competitive the proposition is. Managers need to decide how investment management, administration, custody and insurance are charged, whether the employer, the member or both pay, and how fees differ between the capital guarantee, risk-based and Shariah-compliant options. Employers will compare schemes side by side, so a structure that is simple, competitive and clearly explained is critical.

4. Fund offering document

The fund offering document is effectively the scheme's prospectus. The resolution uses it to set out the details and conditions of the offering, and the appendix requires it, along with the subscription form, to spell out the rights and obligations of both the employer and the member.

5. Service provider appointments

Cabinet Resolution 96 lists the fund's Investment Fund Service Providers as the fund manager, administrative service provider, custodian, insurance company, auditor and legal consultant, along with any other entity the CMA specifies. Each has to be licensed by the CMA and meet the appendix standards.

The Administrative Service Provider must:

• Have at least three years of experience administering investment funds
• Send employers and members account statements and periodic reports at least every six months, electronically or by another method set out in the fund offering document, covering basic and voluntary contribution balances and returns
• Give the CMA and MOHRE financial performance reports, compliance reports and required procedures on request
• Provide customer service and handle end of service complaints from members and employers, trying to resolve them amicably before they go to the authorities

A specialist partner can be appointed to manage specific activities such as platform provision and scheme administration; however, the administrative service provider remains responsible for overseeing anything it chooses not to manage directly.

The Custodian must:

• Be a local bank licensed by the Central Bank, with capital of at least AED 3 billion
• Have at least AED 1 billion in funds and assets under its safekeeping
• Have at least three years of experience as a custodian for investment funds
• Audit annual reports and monitor the compliance of the fund manager and administrator, telling the CMA immediately about any concerns
• Receive contributions and pay out member entitlements on the instructions of the fund manager and administrator, once conditions and documents have been checked
• Make sure the fund manager's decisions are taken only in the interests of members

6. Insurance arrangements

Under the appendix to Resolution 96, the fund manager has to insure both the basic subscription amounts paid by employers and the amounts due to beneficiaries, so that the insurance company covers them in full. This feeds directly into the licensing submission.

7. MOHRE no-objection and CMA fund licensing

The application to the CMA to establish and license the fund must include a statement that MOHRE does not object to the fund structure, custodian, administrator and other proposed appointees. So the conversation with MOHRE needs to start early. Once MOHRE is comfortable, the CMA submission can be made.

8. Connectivity with MOHRE

MOHRE is involved at almost every stage of the scheme lifecycle, so once approval is granted the scheme's systems need to connect with it cleanly. Planning the integration, data flows and approval handling early means the digital journey runs smoothly from enrolment through to payout.

9. Administration platform and operational readiness

The scheme defines a precise operating model that closely aligns with best practices seen in other jurisdictions, for example the DIFC:

• Employer contributions are paid monthly, in AED, within 15 days of the start of each month
• Late payments follow a set escalation process, starting with a written warning from the fund manager and then notification to MOHRE
• Employers subscribe for at least one year, and can recover contributions if an employee leaves within their first year
• Employees receive their entitlement within 14 days of their employment ending
• Employees can make voluntary contributions of up to 25 per cent of total wage and withdraw them during service

Behind each of these sits a process, a data flow and a reconciliation, delivered through an employer portal, a member portal and a back office. A white label gratuity platform avoids building all of this from scratch and leaves the manager free to focus on the fund.

10. Launch and first employers

Employers enrol through the digital journey of their selected savings scheme, which is integrated with MOHRE. Early wins typically come from related group companies, partnerships or existing corporate relationships.

Early adopters tend to be employers with a strong focus on employee benefits, or those bringing their end of service arrangements in line with wider group standards.

What wins employers?

Employers look at the investment proposition and the employer and member experience together, and both need to be strong to win the mandate. Both also need to stay strong to keep it, since employers can switch managers if service falls short. HR and finance teams deal with the scheme every month through contribution files, joiners, leavers and reporting, so gratuity administration software that makes that work easy is a differentiator.

Build or partner?

Most financial institutions entering as fund manager already have the investment capability. Far fewer have a workplace savings platform built for this. Partnering means the manager can concentrate on fund performance while the platform takes care of employer onboarding, contributions, MOHRE connectivity, member servicing and payouts. See how Cohlay works with fund managers entering the UAE market.

How long does it take?

As a rough guide, an institution with an eligible, onshore licensed fund management entity might plan on six to nine months from decision to first employer, with several workstreams running in parallel:

• Month 1: readiness and business case
• Months 1 to 3: fund design, fee structure, fund offering document, and choosing service providers and an insurer
• Months 2 to 4: MOHRE no-objection
• Months 3 to 7: CMA fund licensing
• Months 1 to 6, alongside the above: administration platform, MOHRE connectivity and operational readiness
• Months 6 to 9: launch and first employers

These are planning ranges, not regulator service standards. Real timings will depend on the regulators and on how complete each submission is. Partnering for the administration platform usually shortens the critical path. An institution without an onshore licensed fund management entity should treat licensing as a separate project that comes first.

A market with room to grow

The UAE's alternative end of service benefits market is still in its infancy, and there is plenty of room for more providers. Every new fund manager that enters brings fresh investment thinking, sharper pricing and better service, and that raises the bar for everyone. Employers get more choice and members get better outcomes. For Abu Dhabi financial institutions with the scale and the appetite, the opportunity is there to help shape the market and build something that serves the UAE's workforce for years to come.

Sources

• Cabinet Resolution No. 96 of 2023 Regarding an Alternative End-of-Service Benefits System, including its appendix on the standards and obligations of Investment Fund Service Providers: uaelegislation.gov.ae/en/legislations/2309
• Ministerial Resolution No. 668 of 2023 Regarding Subscription Under the Alternative End-of-Service Benefits System, via MOHRE's Alternative End-of-Service Benefits System guidance page: mohre.gov.ae/en/guidance-and-awareness-portal-new/alternative-end-of-service-benefits-system
• MOHRE announcement on the implementation of the Savings Scheme (November 2023): mohre.gov.ae
• Federal Decree-Law No. 32 of 2025 concerning the Capital Market Authority, which renamed the Securities and Commodities Authority as the CMA with effect from 1 January 2026: uaecma.gov.ae