Abu Dhabi announces new amendments to the retirement system for workers in the public and private sectors
Aiming to preserve a competitive and sustainable retirement system that promotes equity between residents working in the government and private sectors in the emirate, the Abu Dhabi Retirement Fund announced changes to the Retirement Law as well as the introduction of new privileges. The amendments also included the creation of a contemporary, adaptable retirement system that satisfies the insured's functional and social needs and gives them the chance to continue working after reaching the minimum number of years of service required for retirement in order to receive better retirement benefits.
The amended law is applicable to insureds who continue to serve without affecting their previously acquired rights. This means that insureds are still able to calculate their pension for the service periods they completed under the previous system, as well as any other insurance benefits they may have obtained under the previous system prior to the amendment.
Upon fulfilling the minimum years of service required for retirement (25 years), the insured receives a retirement pension equal to 80% of the salary subject to deduction. He can increase this percentage annually by the equivalent of 2% for each additional year of service until he reaches 100% of the salary subject to deduction. This is one of the most notable amendments to the retirement system. Prior to the amendment, the retirement pension percentage stopped at 80% despite the fact that the insured had served for a maximum of years. The insured stays employed over an extended period of time.
According to the Fund, the amended retirement law equalized benefits for insured workers in the public and private sectors by unifying the formula for calculating retirement pensions for both current and new employees. The formula is based on the average salary subject to deduction for the previous six years, and it also unified the maximum salary subject to deduction for the insured. renewals totaling 100,000 dirhams from both sectors.
With no changes to the percentage of retirement contributions for the current insured (staying in service), the amended law maintained the same percentage of retirement contributions at 26% of the salary subject to deduction, of which the new insured bears 11% and the employer bears 15%.
The minimum retirement age under the modified law was established at 45 years old in the first year of application, as long as 25 years of service were fulfilled. After that, the age would rise gradually at a pace of 6 months per year until it reached 55 years old.
The revised retirement system includes provisions that enable women with children to take use of the early retirement system, demonstrating respect for the importance of the family in constructing and advancing society.
A number of new features were also introduced by the amendments, including the option for women to continue contributing to the Fund during a sabbatical period in order to maintain their eligibility for retirement benefits. This system is designed for women who have children and want to dedicate themselves to raising their families instead of working. Students now have the same option thanks to the new revisions. postgraduate research under legally mandated restrictions.
With the intention of giving national expertise the chance to continue contributing to the various sectors of the national economy for a longer period of time, the new amendments permit combining the retirement pension and salary after completing the maximum number of years of service or after reaching the retirement age specified by law.
The option to continue working in order to take advantage of the new benefits offered by the amended system, most notably the potential to increase the percentage of the retirement pension to 100% of the salary subject to deduction upon completion, is granted to the insured who meet one of the retirement conditions in the previous retirement system. Number of years of service maximum.
