Whilst some companies in the Middle East employ a corporate benefits package, which may include a corporate pension scheme, most are still opting for the minimum gratuity entitlement - which it is likely will soon to be relinquished due to the numerous inherent complications.
 
Though gratuity schemes are undeniably great for you as the employer, they are not necessarily so for your employees so more and more astute employers are making the move to gratuity replacement schemes (corporate pension schemes) to attract and retain key members of staff.

As an example of the difference a corporate pension can make, if we took an imaginary employee who has worked for your company for 15 years, their first years Gratuity entitlement has made no growth (not even at deposit rate!) for the remaining 14 years that they have worked for you. Just think what that could have yielded over the same period in some managed pension fund - and how much happier that employee would be.

If the employee stays with you for 20 years and earns AED 15,000 a month, their gratuity upon retirement is unlikely to exceed AED 250,000. That may sound a lot initially but if they live for a further 20 years it will provide them with AED 12,500 a year - just US$ 3,400 or £1,800 a year! Employees are starting to realise this for themselves.

It is important to remember that there are major benefits for you as the employer (in terms of staff acquisition, retention and productivity) as well as  your employees. This is money that you are obliged to put aside anyway, it is not going to result in any additional outlay, so why not let the gratuity contributions work smarter for both you and your employees?

How can Candour Consultancy help?

Whether you are looking to reward senior management or assist employees plan for their future, Candour offers advice on a wide range of flexible corporate pension and group personal pension schemes to meet your company’s needs with benefits that can include one or more of:

• The option to establish different contribution levels and benefits for each tier of staff

• The option for employer only, employee only or employer & employee contributions

• The option to hold back benefits until the employee has undertaken a specific length of service

• The option to hold the pension plan in trust to avoid fraud

• The option to attach life assurance or death in service

All the corporate pension schemes Candour Consultancy recommend are international policies with leading financial institutions. These policies have the flexibility to receive contributions and pay benefits anywhere in the world.

For further information on Gratuity replacement plans, just click here to provide us with your preferred contact details and an overview of your companies requirements.