Picture used for illustrative purposes.

The new Decree Law No.57 of 2023 announced by the General Pension and Social Security Authority (GPSSA) contributes to enhancing an insured Emirati's chance in obtaining a retirement pension by merging employment years at no cost, thereby increasing the possibility in obtaining a pension and/or end-of-service gratuity once ready to retire.

Once an insured Emirati chooses to merge employment years when joining a new entity, previous and subsequent employment years will be legally consolidated, and the end-of-service gratuity will be paid upon the overall employment period ending.

An insured person who opts to pay an end-of-service gratuity upon joining a new entity, who then wishes to merge service years, can still choose to do so given that his/her share in contributions for the periods merged are paid, in such case the cost of the merge is calculated on the contribution account on the date of submitting the merge request, multiplied by 26% and then multiplied by the desired service periods in months.

The cost of merging service years is paid prior to ending the employment period in one lumpsum and within 30 days from the date of approving the merge request, otherwise, the merge request will be cancelled, and the insured person may pay the cost in instalments according to the conditions set by the Board of Directors.

Furthermore, when the insured’s service period ends without paying the full amount, the included service period is automatically calculated as per the amounts actually paid.

The UAE Pension Authority highlighted the fact that the periods allowed to be merged include: previous service years with an employer to whom the provisions of the new law apply, previous service years with an entity approved by the Council of Ministers, as well as employment years prior to acquiring the UAE nationality. The provisions of the law apply to everyone who obtains the citizenship, given that the entity is subject to the provisions of the law as of the date of obtaining the nationality, in which case employment periods prior to this date may be merged.

In order to avoid complete or partial deprivation in pension or gratuity, insured individuals are required to express their desire to merge employment years prior to ending their service, stating that their service years have not ended as a result of a termination, and that they were employed on a full-time basis and not based on training or a temporary period.

GPSSA added that if a pensioner returns to work, he/she may merge the entitled service period by which he/she was entitled to a pension to the new service years, so that at the end of the service period he/she will be treated on the basis of both periods together, considering the terms and conditions issued in this regard.

WAM