UAE considers mandatory shift from gratuity to savings-based retirement schemes

8 articles · Updated · Ogletree Deakins · Apr 27

MOHRE has completed a policy evaluation and invited proposals through February 2026 to replace the end-of-service gratuity system, with a mandated transition timeline under discussion for 2026.
A mandatory savings scheme would require private-sector employers to adjust wage structures and compliance practices, fundamentally changing expatriate compensation and aligning UAE retirement benefits with Western pension models.
This potential reform is part of broader UAE modernization efforts, including relaxed alcohol rules, a Monday-Friday work week, and stricter Emiratization enforcement, aiming to attract international talent while reinforcing national priorities.

Is the UAE’s shift to a mandatory pension-style system a better deal for expatriates than the traditional gratuity?

Will stricter Emiratization quotas ultimately drive away the top global talent the UAE's social reforms aim to attract?

Can the UAE's social liberalization and strict employment laws truly coexist, or will one eventually have to give way?

How will the UAE solve its tech paradox: a surplus of talent but a severe shortage of AI specialists?

With its 'omni-alignment' strategy shattered, what does the UAE's foreign policy pivot mean for regional stability?

How will massive infrastructure investments protect the UAE's economy from future geopolitical shocks and supply chain disruptions?