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UAE: Some insurance benefits will be lost by Emiratis who retire after 20 years

UAE: Some insurance benefits will be lost by Emiratis who retire after 20 years

 The General Pension and Social Security Authority (GPSSA) has provided some crucial details on the insurance benefits and job history of Emiratis.

The authority stated, "The response, in short, is simple; the less time spent working, the more likely an insured individual is to lose various insurance benefits, such as not receiving their desired retirement pension," in response to a frequently asked question about whether retiring after working 20 years is a sufficient time-period for Emiratis to obtain a beneficial insurance scheme for them and their families after the retirement.

According to the GPSSA, a retirement pension is given to government employees based on the average monthly salary contribution over the previous three years of employment, whereas in the private sector, the calculation is based on the previous five years of employment or, if less than five years, the entire contribution period.

A 20-year service period has modest insurance limitations, thus the GPSSA does not" suggest a person to choose it. However, if an insured person works for 20 years, they are entitled to a pension at a rate of 70% of the average contribution from monthly earnings.

The GPSSA explained that an insured's decision to continue working beyond a period of 20 years results in "an increase in a pension by two percent for each additional year spent working" - which is an added value for both the insured and his/her family members -- as part of the "Get Ready - Proactive Financial Planning" campaign launched by the GPSSA until 30th July 2023 to highlight the importance of preparing oneself in advance of retirement.

Additionally, if an insured individual has worked for more than 20 years, they are eligible to acquire a legal service term, which is added to their service years and allows males to purchase up to five years for men and up to 10 years for women.

With the prospect of a growth in the insured's wage, which would ostensibly lead to an increase in the contribution from monthly earnings and to obtaining higher benefits upon retirement, working beyond those years leads in saving the purchase cost.


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