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The Dubai International Financial Centre, DIFC, the leading international financial hub in the Middle East, Africa and South Asia, MEASA, region, today announced the final details ahead of the launch of its new DIFC Employee Workplace Savings Plan, DEWS, that will secure the financial future of more than 24,000 employees based at the centre.
DEWS is a progressive end-of-service benefits plan which will be introduced within the DIFC from 1st February, 2020, to restructure the current defined benefit end-of-service gratuity scheme into a funded and professionally managed, defined contribution savings plan. The initiative also offers employees the ability to make voluntary savings into DEWS, allowing employees working in the DIFC to plan and secure their financial future with ease.
DEWS will offer a low cost investment platform for receiving and managing mandatory employer end-of-service contributions on behalf of employees and any added voluntary savings by employees, including cash or cash equivalent options for those members who do not want to take investment risks with their contributions.
In addition to making voluntary savings on top of employers’ contributions to secure long-term savings goals, employees will also have the choice and flexibility to decide how savings will be managed according to their preferred level of risk, including Sharia-compliant options.
H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of DIFC, said, "The new initiative is aligned with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, to transform the emirate into a ‘land for talent’, where the world’s brightest minds have a productive environment to innovate and create value. The launch of DEWS is part of our efforts to put in place a supportive environment for talent by creating greater financial security for employees of DIFC-based companies."
Essa Kazim, Governor of DIFC, said, "As we unlock the DIFC’s growth potential through our upcoming expansion, DEWS will help ensure we attract the world’s finest and highest skilled talent to the DIFC so that business professionals enjoy easy access to the MEASA region from a dynamic hub that is fully in line with international best practices."
Global professional services provider, Equiom, will act as a master trustee of DEWS and the independent legal owner of contributions made by employers, while ensuring the beneficial interest lies with the employees. Meanwhile, Zurich Middle East and its DIFC-entity, Zurich Workplace Solutions, will provide support to employers and employees through the administration and management of DEWS. Investment services provider, Mercer, will bring an independent, tried and tested investment process to the master trustee of DEWS.
DEWS does not apply any entry or exit charges to employers associated with its administration. Employees will only be subject to an annual management charge ranging between 1.26 and 1.33 percent, depending on their investment risk profile, which covers the services of the trustee, administrator, the investment adviser and the underlying funds with no other fees being charged.
Under DEWS, the minimum employer contribution rates have been designed to broadly match minimum accrual rates under the existing end of service gratuity payment system. Employers are required to make a minimum contribution of 5.83 percent of an employee’s basic salary with less than five years of service. The minimum contribution increases to 8.33 percent of an employee’s basic salary for five years or more of service.
Employers seeking to opt out of DEWS will have to implement a Qualifying Scheme and apply to the DIFC Authority to obtain a Certificate of Compliance.
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