Abu Dhabi: The General Pension and Social Security Authority (GPSSA) clarified on Monday, that Emiratis who retire from their professional careers within 20 years stand to lose certain insurance benefits, the Emirates News Agency (WAM) reported.
Emiratis must work for 35 years and beyond to receive a maximum insurance rate of 100 per cent of the average contribution account salary.
GPSSA said working for 20 years is not a sufficient period to obtain full benefits of the insurance scheme after retirement.
WAM reported the authority as saying, “The less time spent working, the more an insured individual is prone to losing various insurance benefits, such as not receiving their aspired retirement pension.”
The retirement pension is granted to employees in the public sector on the basis of the average contribution of monthly salary for the last three years of service. However, in the private sector, it is calculated for the last five years of service or on the entire contribution period if it is less than five years.
Here are the insurance benefits and options for Emirati workers
However, if an Emirati spends 20 years in service, they will receive insurance at the rate of 70 percent of the average contribution from their monthly salary.
The GPSSA said that a 20-year service period provides minimal insurance limits and that it “does not” advise an individual to opt for it.
The insurance holder’s decision to work for more than 20 years results in “an increase in the insurance by 2 percent for each additional year spent.”
Those who work for 35 years are also rewarded with three paychecks in the insurance calculation for each year they work after those years.
With the legal purchase period of 10 years, the insured can receive a maximum insurance of 100 percent of the average contribution account salary if they decide to retire after 25 years of employment. Males are required to work for a minimum of 30 years to receive the maximum insurance benefit, provided they have a five-year service buy-in.
Continuing to work beyond those years not only results in saving the purchase cost, but with the possibility of an increase in the insured’s salary, it would result in an increased monthly contribution and hence more benefits on retirement.
