Emiratis retire within 20 years of service, lose insurance benefits

Abu Dhabi: The General Pensions and Social Security Authority (GPSSA) on Monday clarified that Emiratis who retire from their professional lives within 20 years will lose certain insurance benefits, the Emirates News Agency (WAM) reported.

Emiratis must have worked for 35 years and above to receive the highest insurance premium rate, which is 100% of the average contributory account salary.

GPSSA says working for 20 years is not enough to get the full benefits of your insurance plan in retirement.

Wan “The fewer hours you work, the more likely the insured will lose out on various insurance benefits, such as not being able to receive the retirement benefits they crave,” the report said.

Pensions are paid to public sector employees based on the average monthly salary contributions for the last three years of service. However, in the private sector, it is calculated on the basis of the last five years of service, or, if less than five years, the entire contribution period.

Here are the insurance benefits and options for UAE workers

However, if an Emiratis work for 20 years, they will be insured at the rate of 70% of the average monthly salary contribution.

The GPSSA says the 20-year service period provides the minimum coverage limit and it “does not” recommend that individuals opt for it.

An insurance holder’s decision to work for more than 20 years results in a “2% increase in insurance for each additional year worked”.

Those who have worked for 35 years also receive three paychecks in the insurance calculation for each year of employment after those years.

The legal purchase period is 10 years, and if the insured person decides to retire after working for 25 years, up to 100% of the salary of the average contribution account is covered. Men must have worked for at least 30 years to receive maximum insurance benefits, provided they have five years of service.

Continuing to work beyond these number of years not only saves on purchase costs, but as the insured’s salary increases, this will lead to increased monthly contributions and thus increased retirement benefits.