When an Emirati reaches the retirement age of 20 they no longer qualify for certain insurance benefits

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

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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 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 a retirement.

Additionally, if an insured person has worked for more than 20 years, they are eligible to purchase a legal service period, which the law allows males to purchase for up to five years and females for up to ten. This period is added to the insured's service years and improves the pension percentage overall when the insured retires.

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.

It is important to remember that after 25 years of employment in the public sector, a covered person has the right to combine their pension and wage when they return to work or start a new career. Female insured employees who choose to retire after 25 years of employment are eligible to receive the maximum retirement pension at 100 percent of the average contribution account salary and benefit from a ten-year legal purchase period, whereas male employees must work for a minimum of 30 years to be eligible for the maximum pension and have a five-year nominal service purchase period.

The maximum pension rate for people who work for 35 years or more is equal to 100% of the average contribution account salary, plus a bonus of three pension account wages for each additional year of employment.

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