The Gulf Cooperation Council (GCC) consists of Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates, and the Sultanate of Oman. This area is unique in having a huge expatriate population: according to international consultants Booz & Co., only about 60% of the labour force are non-nationals in Bahrain and Qatar; in Oman and the Kingdom of Saudi Arabia, expats make up 70% of employees; and in Kuwait and the UAE, around 83%. The total GCC labour force of some 17 million includes 5 million citizens and 12 million expats.
Excellent public pensions for citizens
Pension systems for citizens across the GCC are remarkably generous, with 90% percent of men and all women retiring by the time they are 60 years old. State pensions pay out an average of 80% of earnings. This is sustained by the huge oil and gas wealth of the region, and some of the world’s largest sovereign wealth funds in the UAE and Qatar. In the UAE, contributions are made by employees (5%), employers (15%) and the state (6%).

Expatriates receive lump sum payouts
Foreign workers are not included in the state pension systems, and while there is no mandatory pension scheme for expats, a lump sum end of service gratuity is granted to every employee after at least one year with a company. Under the labour law, employees receive three weeks of pay per year for the first five years of employment, and one month per year of employment for up to a maximum of 24 years. Employers must also provide workers’ compensation and employer liability Insurance, which are also paid as lump sums. In certain countries like Saudi Arabia, Kuwait and the UAE (Abu Dhabi now and the other emirates soon), medical insurance is also mandatory.

Currently, at the suggestion of the World Bank, the Dubai government is evaluating plans to give pensions to foreign workers, and is discussing with the ILO the establishment of a pension fund for expatriates.

Few corporate plans
A recent study showed that less than 25% of all UAE corporations offer enhanced retirement benefits – probably due to lack of expertise, as well as a lack of awareness of the benefits that accrue to corporations from such programs: employee attraction, satisfaction and retention. Other studies show a continuing lack of pension planning: only 13% of surveyed people feel well-prepared for retirement, and only 19% in the region understand their long-term finances very well, comparing to global averages of around 30%. Lack of preparedness for the future is clearly linked with insufficient financial education and guidance.

Dubai Insurance
Dubai Insurance became a Swiss Life Network Partner in September 2011.This leading local insurer underwrites all lines of general, life and health insurance, and has its own medical network covering the UAE. The company is determined to enhance its tailored employee benefit solutions by working with the Swiss Life Network to bring sophisticated insurance advice and corporate pension plans to companies in the region.

For more information
please visit
or contact Mr. David Avasthi
Phone: +971 4 269 30 30 ext. 104