Pension problems: Is the UAE pensive about expat pensions?
UAE’s attempts at expat pension schemes have been shelved before. But now more than ever, it will need to address this rather complicated and often avoided issue, says Eva Fernandes.
June 12, 2011 3:14 by Eva Fernandes
There is a piece on the possibility of an expat pension in this mornings’ The National. If you’re an expat in the UAE for some time, you’d know that, though living tax-free does have its benefits, the lack of pension or some kind of safety net in the Emirates can be a scary prospect. No one agrees more than an unnamed official from the World Bank, who told the paper: “We are providing technical assistance in the area of employment policy…This is a very important initiative for the UAE to design better employment policies based on better data that’s more timely.”
The recent efforts of the governments to set up a pension scheme have been tied in by some as an attempt to make the UAE a more attractive destination for professionals—a much needed factor considering the gaping open wound that is the local property market.
When you ask around about the prospect of expat pensions, it isn’t hard to find residents and professionals in the UAE who are both excited and optimistic about the possibility.
Consider the words of one Tim Searle, the chief executive of Globaleye, who told The National “There’s no pension scheme at the moment and it would be an attractive option for anyone to take up employment here if there was.”
Right you are Tim, but Kipp can think of several reasons of why any kind of expat pension in the near future seems rather unlikely. But rather than be our unreasonable sardonic selves we dipped back into the archives of the local press to bring you two examples.
The first is from Gulf News dated March 2008. The article documents the possibility of a proposed “Pension Savings” draft law which, at the time, was being studied by the General Authority for Pensions and Social Insurance (GAPSI). “The law is still being studied, and we expect the studies to conclude by the end of April, and that will be followed by receiving the necessary initial approvals,” Abdul Rahman Al Baqer, GAPSI’s deputy director, told Gulf News. Well April 2008 came and went and there’s been no change in pension policies yet.
Our next example comes from this article from The National dated October 2010: which chronicles attempts of representatives of the UAE and the International Labour Organization (ILO) to establish a pension scheme for expats. “The employer would have to pay regularly to a fund supervised by a Government entity,” Maurizio Bussi, the deputy regional director for Arab States at the ILO, told The National last year.
…sigh, need we say anymore? These are just two articles we found from the past four years: chances are the UAE’s relatively short history is peppered with attempts of providing its guest workers some kind of long-term security. And though we’d love to conclude this article with some bitter scathing remark about bureaucratic ineffieciency, we will admit developing an expat pension scheme is both tricky and, hate to use the word, complicated—especially when considering ongoing Emiratisation drives.
Nonetheless, as a quick flick through the news archives indicates, this is a question that needs urgent attention, if (and that’s a big ‘if’ that the country must address) the UAE wishes to secure its future as a destination for working professionals across the globe.