The UAE’s retirement income system has improved its score for the fourth year in a row, a study showed on Wednesday.
According to the 16th annual Mercer CFA Institute Global Pension Index (MCGPI), the UAE’s index value increased from 62.5 in 2023 to 64.8 in 2024, primarily due to the introduction of a minimum access age to receive benefits, which was announced in November 2023. In particular, the UAE retirement system saw improvements in adequacy, with a score of 77.1, to rank 12th globally in 2024, driven by the country’s generous retirement benefits. It also improved its score for the integrity of its pension systems, 75.3 (25th globally), supported by the high degree of governance structure.
Overall, the score sees the UAE rank 23rd in the study, in the same grade category as countries with long-established robust pension systems such as the United States, and alongside regional peers such as the Kingdom of Saudi Arabia.
The UAE’s retirement income system comprises a minimum means-tested state pension and an earnings-related national employment-based scheme administered by Abu Dhabi Pension Fund for the Emirate of Abu Dhabi, Sharjah Social Security Fund for the Emirate of Sharjah and the General Pensions and Social Security Authority for the rest of the emirates. Employees contribute 5% of salary, and employers contribute 12.5%–15% of salary, with benefits guaranteed by the government.
According to the report’s authors, the overall index value for the Emirati system could be increased by increasing the coverage of employees in occupational pension schemes, thereby increasing the level of contributions and assets; improving the required level of communication to members from pension arrangements; increasing the state pension age as life expectancies rise; and reducing the level of household debt.
Tarek Lotfy, President, Mercer India, Middle East, and Africa said: “The UAE is taking a far-sighted approach to the sustainable development of its pension system, preparing for longer life expectancies and for an increased number of people reaching retirement age, which will necessitate a well-run and adequately provisioned national pension program.”
Claudia Maldonado, Head of Savings and Pensions, Mercer Middle East added, “The UAE has recognized that there is a global trend of moving away from defined benefit (DB) plans and shifting towards defined contribution (DC) arrangements and is taking the necessary steps to safeguard and support the needs of tomorrow’s retirees by encouraging increased flexibility and personalization.”
You may also like
Huge reality star completely unrecognisable as she 'ages up' for spooky transformation
Will Thomas Tuchel have more success with England than Gareth Southgate? Have your say
Larsen & Toubro Launches First Multi-Purpose Vessel 'Samarthak' for Indian Navy
Zelensky unveils Ukraine's 'victory plan'
7 more flights get hoax threats today; aviation minister Ram Mohan says those responsible to be duly prosecuted
Why did MUDA chairman resign, if there is no scam: K'taka BJP
Yashasvi Jaiswal's Childhood Coach Reveals Southpaw's Secret To Success In Australia
Campaigners backing assisted dying law change hold Parliament demo
Linda Robson quashes Pauline Quirke feud rumours with endearing five-word comment
Four teens drowned in crash on way to camping trip one day after haunting Snapchat video
South African police detain suspects for mass shooting
Kyle Walker hoped to repair marriage before wife Annie Kilner filed for divorce
Golf star teased by wife after speaking out on PGA Tour and LIV Golf merger
Get 35% off Liz Earle skincare set that leaves skin looking 'fresh and glowy'
Brit visiting Afghanistan 'feared he was dead' after Taliban look in friend's backpack
'70s English rock band 'closer and closer' to reunion and world tour
Not Smriti Mandhana! Mithali Raj Calls For 24-Year-Old To Replace Harmanpreet Kaur As India Captain
Monty Python's Michael Palin shares amusing three-word epitaph as says 'I'll die soon'
Burundi announces timetable for 2025 elections
2024 Namura Cup: India's Kartik Singh tied at 10th place after halfway mark