UAE’s pension authority: Merging employment services improves retirement options

Merging previous service periods is a pivotal step to pursue in order to enhance an insured individual’s chances in obtaining a better retirement pension scheme, since it results in a continuation and extension of employment years up until the insured completes the remaining years eligible for a pension, stressed the General Pension and Social Security Authority (GPSSA).

As part of the “End it Right” campaign’s quest to ensure insured individuals receive the highest retirement pension possible, while securing their post-retirement future expenditures, individuals who are estimated to work for 20 years or more are prone to receiving higher benefits, regardless of whether those employment years were merged or continuous.

The UAE Pension Law allows the insured to add the previous service years to the subsequent service years as long as the required controls and provisions are met. It is worth noting that merging services is optional, however it is advisable since it allows the insured to add any number of years he/she wishes more than once.

Additional costs are calculated by multiplying the contribution account salary on the date the additional service has been submitted multiplied by 20%, which is the percentage of contributions due from both the insured and the employer, multiplied by the period to be added in months.

GPSSA’s Board of Directors facilitated the merge process when they gave the insured the option to pay an additional cost, which does not require paying a down payment but rather paying in installments over a four-year period so that the monthly installments are not less than a quarter of the salary as per the UAE Pension Law.

When requesting to add a new service period, insured individuals must ensure their initial request has been settled based on calculating the additional periods corresponding to the amounts already paid, and that the additional period is calculated on the contribution calculation salary on the date of submitting the new request.

The insured has the option to pay the costs of merging the service in one lump sum or in monthly installments, and risk having their request canceled if the cost of adding the service as per the scheduled installments, while paying two consecutive installments is not done on time.

The service period merged is calculated in accordance to the amounts paid or if the insured wishes, for the remainder of the employment duration, given that a new application is submitted. If the insured’s service ends without paying the full cost of the merge, the additional service period is calculated based on the amounts actually paid.

An insured’s obligation to continue paying the installments is dropped if he/she is deceased, provided that 50% of the total cost has been paid. If the value paid is less than 50% the rest of the percentage will be deducted from the individual’s pension.

The insured individual must submit a written request to his/her entity prior to the end of the service period. Additionally, in order to receive a pension and/or end-of-service, the combined employment years must not have expired for any reason, nor will they be approved for temporary, freelance, daily waged jobs or trainings.

Source: sharjah24