Discussions are on regarding expansion of DEWS fund range

Reena Vivek, Senior Executive Officer at Zurich Workplace Solutions, the administrator of DEWS, the end-of-service benefits scheme for DIFC-based companies, on how the scheme is meeting the investment goals of the members.

“Currently, there are discussions relating to expansion of the fund range, but no decision has been taken on any specific fund. As and when a new fund is added to the plan, notifications will be sent to all members along with detailed information on the fund and its investment objectives so that members can take an informed decision,” said Reena Vivek, Senior Executive Officer at Zurich Workplace Solutions (ZWS), part of the Zurich Insurance Group.

ZWS is an administrator of the Dubai International Financial Centre (DIFC) Employee Workplace Savings (DEWS) scheme -- an end-of-service benefits scheme for expatriate workers. It has been introduced within the DIFC to restructure the currently defined employee benefit scheme into a funded, professionally-managed and defined contribution plan.

ZWS also facilitates enrolment and management of contributions, enables the investment process and administers withdrawals through an online portal, DIFC based support team and contact centre.

“Plans such as DEWS are critical to ensuring a disciplined approach to funding End of Service Gratuity (EoSG) and to protect the interests of employees. Companies that participate in such plans demonstrate their commitment to employee welfare and have the ability to attract and retain talent in a competitive market,” Vivek added.

Investment strategy

However, what’s more interesting to note is the way the portfolios are professionally managed at DEWS by Mercer, the investment advisor to the DEWS plan, which actively manages the portfolios in order to optimise their performance and returns to the members.

“The DEWS plan is designed to offer a range of funds that are appropriate for an employee money purchase plan and meets the investment goals of the members,” said Vivek, adding, “The DEWS plan has 5 risk-based portfolios that have been specifically designed to meet the risk profile and investment horizons of the members.”

And this is what, she said, that differentiates DEWS from the usual end-of-service gratuity or pension solutions across the UAE and the region.

“In the traditional gratuity schemes, it is normal to see a larger range of funds – up to 200 funds in some cases – which may not benefit from any active management. For members with a limited understanding of investments and fund selection, a larger fund range can cause some challenges when it comes to determining how their contribution should be invested,” she maintained.

Fund selection

So how does Zurich Workplace Solutions work with its investment advisor to plan the investment process of the contributions?

“Mercer is appointed by Equiom (the trustee of the DEWS plan) and they provide Equiom with recommendations on the funds that should be made available to members. The final decision on the fund range is taken by the Trustee after discussion with the Supervisory Board,” said Reena, adding, “once a fund has been approved for the plan, Zurich then works with Equiom, Mercer and the fund manager to onboard the funds onto the DEWS platform so that members have access to it. Once available on the platform, members can review the fund information including fact sheets and performance information.”

Members can seamlessly switch in and out of funds via the member portal or app, and members can choose an investment strategy that best suits their risk appetite.

“All contributions are automatically processed in line with the investment strategy that is chosen by the member,” she added.

As of May, 2021, the DEWS has Assets under Administration (AuA) of $170 million and the holdings are diversified across asset classes as well as asset managers.

The asset classes include cash, listed real assets, alternatives, growth fixed income, defensive fixed income and equity.

“The asset allocation across these asset classes vary by the investment strategy and are rebalanced in order to meet the risk-return goals of each strategy,” said Vivek.

Talking about the funds under the DEWS plan, Vivek said currently DEWS has 5 conventional and 3 Shariah-compliant funds, two of which were launched in April last year.

The Table below gives a snapshot of the performance of different funds under DEWS plan, as of May 31, 2021. Most of the funds were able to give double-digit returns over the past one-year period.

 

Source: ZWS