Final guidance has been issued by the DIFC, a special economic zone in Dubai, on the implementation of the new DIFC Employee Workplace Savings plan (DEWS), which replaces the current end-of-service gratuity payment plan for expatriate employees. Click here for additional information.

Implementation process and timeline

The intended commencement date of the DEWS set for 1 January 2020, has recently been pushed back to 1 February 2020, as there are many points that remain to be clarified and since the DEWS legislative and regulatory regime is yet to be published. The extension would give employers and employees more time to familiarize themselves with the new rules and onboarding requirements. There will be a grace period until 31 March 2020, for DIFC employers to enroll their employees into the DEWS or an alternative qualifying scheme. Contributions should, however, be made retrospectively from February salaries.  

Employers must either join and remit contributions to the DEWS plan or opt out with a qualifying alternative arrangement (see Employer Action Plan below). There will be fines for non-compliance.

DIFC has been directly contacting local employers and several support activities are currently being undertaken to help DIFC employers with the enrollment and other processes. This includes employer surveys, town hall meetings, and supporting materials, such as digital brochures and informational videos. DIFC employers should remain alert to any communication shared by the DIFC in this regard.

DEWS plan service providers

The following service providers have been appointed to oversee the DEWS plan:

  • Equiom has been appointed as master trustee to act as the independent legal owner of the contributions made by companies within the DIFC, while ensuring the beneficial interests lie with the employees.
  • Zurich has been appointed as the plan administrator to provide full support through the administration and management of the DEWS plan.
  • Mercer has been appointed as the investment adviser of the master trustee.

Contribution rates

Required contributions under the DEWS will broadly match the current responsibility of employers under the end-of-service gratuity payment plan (i.e., 21 days of basic wage for each year of service up to 5 years and 30 days for every additional year of service). Under the DEWS plan, the minimum contribution rate for employees will be a percentage of their monthly basic wage as follows:

  • 5.83% for members with fewer than 5 years of service.
  • 8.33% for members with 5 years of service or more.

Additional voluntary contributions will be allowed.

Application scope

The DEWS plan applies only to expatriate employees working in the DIFC. The plan will not include the UAE nationals or Gulf Cooperation Council (GCC) nationals who are accruing a social security benefit separate from the requirements of the employment law. However, such employees and their employers may choose to make voluntary contributions to the DEWS plan.

Action plan for employers

Employers will have several items to consider:

What to do with end-of-service gratuity accruals

As of 1 February 2020, all accruals for the current gratuity scheme will cease. Employers remain liable for accrued gratuity benefits before that date. There is a provision to transfer funded accruals to a DEWS plan, however, employers should be certain to obtain the employee’s prior written consent to such a transfer.

Update systems and documents

Payroll systems, HR systems, employment contracts, employee handbooks, benefits summaries, and offer letter templates.

Opting out of DEWS Plan/Certificate of Compliance

Employers may opt out of the DEWS Plan and receive a Certificate of Compliance if currently operating a qualifying scheme. Certificates of Compliance should be obtained prior to 31 March 2020. A qualifying scheme (located in the UAE or elsewhere):

  • Provides for at least monthly contributions by the employer on behalf of the employee for benefits upon leaving service.
  • Has contribution rates at least equal to the amounts required for the DEWS plan.
  • Should be an employee “Money Purchase Scheme.”
  • Each of the Operator, Administrator, Investment Adviser and Fund Manager of the scheme in question must be regulated by a Recognized Regulator as determined within the discretion of the Board of the Directors of the DIFC.
  • Have minimum design, operating, reporting and investment requirements.

For more information, see DIFCA’s Consultation Paper No. 7 here.

Participation in DEWS Plan

To participate in the DEWS Plan, employers must:

  • Complete a Deed of Participation in the Master Trust as part of the DEWS digital enrollment process for each legal entity in the DIFC. This will include consent from employees to share their personal data.
  • Upload current employee data to the administrative platform.
  • Share details of employee’s monthly basic wage and voluntary contributions.
  • Other than remitting contributions, no additional fees or costs are required of employers.

Employers need to make necessary changes to their HR and payroll systems in order to:

  • Make mandatory contributions for eligible employees.
  • Deduct the amounts relating to employee voluntary contribution from employee payroll.
  • Upload monthly contribution files.
  • Transfer the relevant amount to the bank account of the DEWS Master Trustee for investment.

In addition, employers may want to prepare internal communications for employees who may wish to have more information on their DEWS investment options. Investment advice is not provided. Education content on the site will cover general inquiries.

Employers with questions may direct them to

Additional resources

DEWS in the DIFC – UAE government website

Original article

For the past three years, a working group at the Dubai International Financial Centre (DIFC) has been reviewing the end-of-service benefit, defined as the lump sum payments legally due to employees upon leaving their employers. The DIFC has finally proposed replacing end-of-service gratuities with a defined contribution workplace savings plan for its expatriate workforce, known as the DIFC Employee Workplace Savings (DEWS) trust. The reform is expected to take effect on 1 January 2020.


In the UAE, employers are not required by law to provide expatriates with pension and savings funds. However, employers are mandated to provide expatriates with an end-of-service gratuity that is perceived as a bonus by some and as retirement savings by others. With the existing end-of-service gratuity, employees are exposed to the risk that the payment may not be paid in full upon termination. A defined contribution system would provide a funded basis by which employees can feel secure in their long-term savings plan for retirement. In addition, with the increased years of service of expatriates in the UAE, the new measure would reduce employers’ cash risk and help them better manage their balance sheet. Moving to this system would bring the UAE on par with global best practices and eventually help the DIFC to attract and retain talent.

Key details

Once implemented, DIFC employers would be required to contribute monthly to the new DEWS trust unless they operate a similar pension plan (located in the UAE or elsewhere) and with contribution rates at least equal to the amount that should be received under the end of service gratuity system. DEWS contribution rates will still be based on employees’ final basic wage.

Employers would still be required to pay the end-of-service gratuity up to the expected date of the change on 1 January 2020. The employer contribution rate to the DEWS trust is expected to be equal to the current gratuity payment as outlined by the DIFC employment law. The current gratuity payment is calculated as follows:

  • An amount equal to 21 days of the employee’s final basic wage for each year of the first five years of service and,
  • An amount equal to 30 days of the employee’s final basic wage for each additional year of service.

Starting from 28 August 2019, the employees’ annual basic wage shall not be less than 50% of their total annual earnings as clarified by the new DIFC employment law.

Employees would also have the option to contribute additional funds to the trust. Employees will be able to manage how their money is invested in the 10-12 trust funds offered for investment. In doing so, employees will also absorb the fund administration and management fees.

The DEWS trust plan differs from a pension plan in that employees would be able to withdraw everything from the trust when they cease DIFC employment or retain funds in the trust if they prefer.

Next steps

This proposal is still in the consultation phase. The DEWS legislative framework is expected to be drafted in July 2019. DIFC employers should monitor and review existing policies in preparation for changes to be implemented starting January 2020. It is still unclear whether the rest of the UAE private sector will adopt the new savings scheme.