How are end of service benefits protected in the UAE?

Moving end of service benefits (EOSB) off the employer’s balance sheet only helps employees if the money that leaves is properly protected. The UAE now has two alternative end of service benefits regimes that do this, and they answer the protection question in very different ways. One relies on who holds the money. The other relies on what the law says can and cannot happen to it.

How are end of service benefits protected in the DIFC?

In the Dubai International Financial Centre (DIFC), employers fund EOSB monthly into a Qualifying Scheme. Two employee savings schemes are available today: DEWS (DIFC Employee Workplace Savings), the default scheme launched in 2020, and Go Saver, launched by Sukoon’s workplace savings subsidiary. Both are trust based.

The core protection is ownership. Under DEWS, contributions are legally owned by an independent master trustee, while the beneficial interest sits with the employee. Go Saver follows the same principle, with an independent trust company appointed as trustee. Once a contribution is paid, it is no longer the employer’s money, and it is not the administrator’s either. If the employer fails, the assets are not part of its estate.

The second protection is separation of roles. In both schemes, the trustee holds the assets and a separate administrator runs enrolment, contributions, records and withdrawals. Investment expertise sits with the appointed investment managers who curate the fund range with trustee approval. No single party controls the money end to end.

The third is oversight. The Dubai Financial Services Authority (DFSA) oversees the regulated duties of trustees and administrators. Both schemes add a further layer of governance through a supervisory body, covering governance matters that sit outside regulatory supervision.

The fourth is enforcement. The DIFC Employment Law requires employers to make contributions to a Qualifying Scheme, and failure to pay can result in fines imposed by the DIFC Authority.

On investment risk, DEWS members choose from a fund range and carry the investment risk on what they choose. Go Saver is much the same but includes a capital protected option, backed by insurers, alongside its other funds. A capital protected option is a design choice, not a requirement of the regime.

How does the UAE Savings Scheme protect end of service benefits?

Cabinet Resolution No. 96 of 2023 created the voluntary alternative end of service benefits system for the UAE private sector, known as the Savings Scheme. It is supervised by the Ministry of Human Resources and Emiratisation (MOHRE) and the Capital Markets Authority (CMA). Employers choose a savings scheme from the approved list and pay monthly contributions into it. Protection here is built into the law and the fund rules.

The core protection is a statutory ring-fence. Basic contributions paid by the employer cannot be made subject to judicial enforcement, seizure, liquidation or bankruptcy procedures.

The second is a capital protected baseline. Every approved scheme must offer a capital protection option as its basic option. Members who do not make a choice are placed in it, and for workers classed as unskilled it is the only option. A Sharia compliant option must also be available.

The third is prudential requirements on the provider. Schemes run as public local funds licensed by the CMA, with additional capital required from the fund manager. The fund’s assets are held by a custodian, which must be a UAE bank licensed for this role by the Central Bank, keeping them separate from the fund manager’s own balance sheet.

The fourth is enforcement. MOHRE can suspend new work permits once basic contributions are two months overdue, with per-employee monthly fines once arrears pass four months.

On investment risk, if a member moves out of the capital protected option into a higher risk one, investment losses are theirs, and they have no claim against the employer for them.

What is the difference between the two models?

Both regimes take EOSB out of the employer’s hands and away from its creditors, and both back contributions with penalties for non-payment. The DIFC model does it through trust law, independent ownership and a clear split of duties. The federal model does it through a statutory shield, a mandated capital protected default and enforcement backed by the labour ministry.

What role does technology play in protecting member money?

Neither model protects anyone on paper alone. The protections hold only if the operations underneath them work every month, for every member.

That means contributions reconciled and paid on time, so penalties never become the employer’s problem. It means each member’s entitlement recorded clearly and separately from the employer’s books, so ring-fencing has substance. It means defaults applied consistently, member choices properly disclosed and recorded, and a complete audit trail that lets trustees, regulators and auditors do their job. And it means the data itself is secured to the same standard as the money it represents.

The regulation sets the protections. Technology is what makes them hold in practice.

Cohlay is a workplace savings platform for providers operating alternative end of service benefits schemes in the UAE.