The Ministry of Human Resources and Emiratisation (MoHRE) has announced the completion of the evaluation phase for policies related to the Alternative End-of-Service Benefits (EOSB) Savings Scheme, marking a significant step in the UAE’s ongoing labour market reforms.
The initiative forms part of the broader strategy of the United Arab Emirates to enhance employee financial security, promote transparency, and foster a sustainable and competitive work environment.
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A Modern Approach to End-of-Service Benefits
The Alternative EOSB Savings Scheme offers an optional, structured investment-based model that serves as a sustainable alternative to the traditional end-of-service gratuity system. Under the scheme, employers contribute monthly amounts into approved investment funds on behalf of employees, rather than accumulating a lump-sum gratuity payable at the end of employment.
The model aims to:
- Provide employees with potential investment returns over time
- Improve transparency regarding fees, risks, and performance
- Reduce long-term financial liabilities for employers
- Encourage a culture of structured savings
Stakeholder Consultation Underway
MoHRE has launched a digital public consultation through the UAE Government Portal, inviting employees, employers, investors, and other stakeholders to provide feedback. The consultation seeks to refine operational mechanisms and ensure the framework supports both workforce protection and business sustainability.
Key themes raised by stakeholders include:
- Greater transparency in fund performance reporting
- Clearer communication of fees and risk structures
- Simplified procedural requirements
- Awareness initiatives to explain the scheme’s long-term benefits
The Ministry emphasised that consultation outcomes will guide policies designed to protect employee rights while strengthening labour market stability.
Who Is Eligible?
Eligible participants include private-sector employees, free-zone workers, self-employed professionals, freelancers with valid permits, UAE nationals working in government or private entities, and expatriates employed across various sectors.
The optional scheme was introduced under Cabinet Resolution No. (96) of 2023 and represents a strategic shift toward internationally aligned retirement savings models.
Strengthening the UAE’s Labour Ecosystem
The initiative aligns with the UAE’s broader economic diversification and regulatory modernisation agenda. By introducing an investment-based alternative to traditional gratuity, the government aims to enhance financial resilience, boost investor confidence, and support long-term workforce development.
As the consultation progresses, businesses are encouraged to assess the potential operational and financial implications of participation, while employees are advised to review investment options carefully to understand associated risks and projected returns.
Further updates are expected following the conclusion of the consultation phase.
