Survey Shows Support For Workplace Savings Reforms; 71% Of DIFC Employees Confident Of Getting Gratuity
KEY FINDINGS
- 71% of 1,000 respondents to a landmark survey have said they now have a high level of confidence about receiving their gratuity payment when leaving their current employer (in the DIFC)
- In the rest of the UAE, without the benefit of the DIFC's reformed workplace savings scheme, awareness and confidence drops to 40%
- Nearly half of expatriate employees either have no means of maintaining a decent standard of living in retirement, or plan to work beyond retirement age to derive sufficient income
LONDON and DUBAI, June 8, 2021 /PRNewswire/ -- According to a survey on end-of-services benefits (EoSB) in the UAE commissioned by Zurich, Equiom and Mercer to Insight Discovery to gauge the perceptions of the Dubai International Financial Centre (DIFC) Employee Workplace Savings (DEWS) scheme, 71% of DIFC employees are highly confident of receiving their gratuity payment when leaving their current employer.
The confidence in the DEWS scheme is particularly notable when comparing the responses of employees in the DIFC with the responses of employees across the rest of the UAE, where only 40% of UAE respondents outside the DIFC said they were aware of how their gratuity works and what it means for them. Two-thirds were also confident that they knew how their gratuity worked, as well as what it meant for them financially.
Additionally, around 30% of respondents across the UAE have either only a basic level of awareness about their gratuity, or are completely unaware of their gratuity. Moreover, 35% of UAE respondent employees were either "not very" or "not at all" confident about receiving their gratuity payment when the time came.
The much higher level of confidence and understanding amongst DIFC employees, who have only been working with DEWS for the past year, shows "the significant trust generated – in such a short time – by the greater transparency, accessibility and personal control provided by DEWS," said Nigel Sillitoe, CEO of Insight Discovery.
Meanwhile, the survey also highlighted the savings gap between expatriate and other employees in the UAE. For example, 45% of expatriate employees either had no means of maintaining a decent standard of living in their retirement, or were planning to work beyond retirement age to derive sufficient income, while 61% of expats said they had no long-term savings at all.
Claudia Maldonado, DC Solutions Leader at Mercer Middle East, explained that "the opinions of DIFC employees familiar with DEWS demonstrates the importance of the scheme in focusing individual employees on the need to save for their future, by offering flexible and attractive investment options able to meet the requirements of individual employees and their savings goals." In addition, by facilitating a new approach to savings via the workplace, an increasing number of employees, "are also choosing to make additional voluntary contributions from their salaries into the DEWS plan," she added.
Importantly, by offering a certain amount of protection for individuals in terms of gratuity, DEWS has set a new tone in helping employees take the first step in building comprehensive savings and retirement plans.
The success of DEWS will also hopefully help more expats become aware of the need for planning, "to start to put in place relevant and suitable financial strategies to support them in retirement, triggered by the benefits of greater certainty in employee-related savings," said Reena Vivek, SEO at Zurich Workplace Solutions.
The outcome of the survey also suggests there is greater scope for DEWS to be used as a benchmark going forward.
The considerable planning and, especially, the broad industry consultation that went into the development of this legislation and, ultimately, the detail of DEWS, "presents a viable, and now tried and tested blueprint, for the rest of the UAE – and possibly even the region – to build a culture of long-term financial planning supported by regulated solutions that effectively enable discipline and consistency," commented Chris Cain, Client Services Director (Middle East) at Equiom.
The survey on end-of-service benefit (EoSB) payments in different parts of the UAE was conducted in conjunction with the 11th edition of the Middle East Investment Panorama (MEIP).
About Insight Discovery
Insight Discovery is a multiple award-winning consultancy that specialises in market intelligence and strategic communications. We provide solutions and support to major conglomerates, government agencies and many of the world's largest and best-known financial institutions in all of these areas. For seven years running Insight Discovery has been voted "Best Consultancy Firm in the Middle East" by Global Investor, part of Euromoney. Our proven success shows we are outstanding at what we do.
About Equiom
Equiom provides sophisticated clients with professional expertise in delivering multi-jurisdictional investment and asset protection solutions. For over 40 years Equiom has offered fiduciary services to the private wealth sector. This heritage underpins our ethos of responsiveness and excellence in client advisory services, leveraging our global industry, asset class and investment structuring expertise. Equiom (Isle of Man) Limited is licensed by the Isle of Man Financial Services Authority. Equiom (Isle of Man) Limited (DIFC Branch) is regulated by the Dubai Financial Services Authority (DFSA). For information on the regulatory status of our companies, please visit equiomgroup.com/regulatory.
About Zurich Workplace Solutions
Zurich Workplace Solutions (Middle East) Limited (ZWS), part of the Zurich Insurance Group entities operating within the Middle East, is a DIFC based company. As an administrator of the DIFC Employee Workplace Savings (DEWS) scheme, ZWS facilitates enrolment and management of contributions, enables the investment process and administers withdrawals through an online portal, DIFC based support team and contact centre. Zurich Workplace Solutions is regulated by the Dubai Financial Services Authority. For more information about ZWS, visit https://zws.zurich.ae/about-zws.html.
About Mercer
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer's approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world's leading professional services firm in the areas of risk, strategy and people, with 76,000 colleagues and annual revenue of $17 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit https://www.me.mercer.com. Follow Mercer on Twitter @Mercer.
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