Monday, June 13, 2011

Dubai government plans to offer pensions to expats

The Dubai government is evaluating plans to give pensions to foreign workers, based on suggestions by World Bank on how to improve employment laws including staff benefits, UAE daily The National reported on Sunday
 Representatives of the UAE and the ILO have also discussed the establishment of a pension fund for expatriate workers so that the Government can guarantee that workers receive end-of-service benefits.
"The employer would have to pay regularly to a fund supervised by a Government entity," said Maurizio Bussi, the deputy regional director for Arab States at the International Labour Organization (ILO).
"This especially indicates that the UAE is not looking for short-term labour contracts," said Azeem Ibrahim, an economic adviser to the government of Pakistan. "This sends a message that their contributions will be valued."
Nasser Munder, the Filipino labour attaché in Abu Dhabi, said a pension fund for the expatriate workforce would guarantee that workers receive their end-of-service benefits from their employers.
"Workers have said they often find it difficult to get their full and final settlement from their employers at the end of their contract," he said
"We are providing technical assistance in the area of employment policy. It covers the areas of expatriate benefit treatment including pensions," the paper quoted a senior World Bank official in the region as saying.
"There's a lot of experience globally on pension schemes including some that pertain to portable pension schemes, which could be applied to expatriate labour," the official added.
Dubai employers do not provide pensions for expatriates. Financial experts say the prospect of offering pensions could help to woo more foreign workers to the emirate as well as encourage them to stay longer in the country, the paper reported.
A possibility of converting the end-of-service gratuity system into pensions is also being considered, the paper cited an informed source.
Under a federal law dating back more than three decades, companies have to provide only end-of-service gratuities to employees who have completed one or more years of service, the report said.