Proposals from the Dubai International Finance Centre (DIFC) would replace the current end-of-service gratuity payment by a workplace savings scheme for employees by 1 Jan 2020. The proposals follow consultation with DIFC-based employers. The DIFC is special economic zone in the United Arab Emirates (UAE) that has an independent regulatory and legal system.
The current end-of-service gratuity arrangement is an unfunded, defined benefit scheme originally designed to attract talented employees to work in the UAE. That incentive is no longer needed and doesn’t reflect best practice in comparable global locations, the DIFC says.