End-of-service savings schemes: what the voluntary route changes for employers

The UAE's alternative end-of-service savings route lets an employer replace the accrued gratuity liability with a monthly contribution into a licensed, supervised fund on behalf of enrolled employees. Participation is voluntary at employer level and subject to approval, and existing accrued entitlements up to the date of enrolment stay protected.

The attraction for finance teams is cash-flow predictability: a known monthly cost instead of a balance-sheet provision that grows with tenure and final salary. The attraction for employees is that the money sits outside the company, which matters to candidates who have previously worked for an employer that struggled to settle a final payment.

The administrative work is real, though. Enrolment has to be documented per employee, contributions have to run on the same discipline as payroll, and HR needs a clear explanation for staff — the most common complaint in the first months is not the scheme but the absence of anyone able to answer what happens on resignation.