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Legality of UAE’s New Pension Law

Published on : 27 Dec 2023

UAE’s New Pension Law

The new Federal Decree Law No. (57) of 2023 introduced by the General Pension and Social Security Authority in the UAE aims to enhance the efficiency and sustainability of the country's pension and social security systems.

Applicability and Transition

The effective date of the new law applies to Emirati employees working for companies participating in the GPSSA who commenced their employment for the first time on or after the publication date. Existing employees will be subject to the provisions of the Federal Law No. (7) of 1999. Retirees currently receiving payments under previous laws will continue to be safeguarded by the existing law, even if they pursue new employment subsequent to the issuance of the new Federal Decree Law.


The pension system outlined in the legislation sets specific criteria for eligibility, with a minimum subscription period of 30 years and a retirement age requirement of 55. However, recognizing the unique circumstances of working mothers, the law introduces tailored benefits. Working mothers enjoy a more flexible subscription period and can apply for a retirement pension at a younger age. This acknowledges the additional challenges and responsibilities faced by working mothers and aims to provide them with earlier access to pension benefits. Moreover, the legislation demonstrates a progressive approach by allowing working mothers to maintain optional membership during breaks for childcare, ensuring continuity in their pension contributions despite temporary career interruptions. This targeted provision reflects a commitment to inclusivity and recognizes the diverse needs of the workforce, contributing to a more equitable and supportive pension system.

Primary objective of newly enacted law

The recently enacted legislation aims to refine the policies and operational framework of the General Pension and Social Security Authority (GPSSA), focusing on ensuring the efficiency and sustainability of pension financial resources while honoring the Authority's future commitments.

Additionally, the law strives to enhance the flexibility of pension and social security services in the UAE, addressing any existing gaps in services and policies for Emirati nationals in both government and private sectors. It also aims to foster equality in insurance benefits to incentivize Emirati nationals to join private sector enterprises.

The Federal Decree Law applies to Emirati employees entering the labor market for the first time in organizations participating in the GPSSA, starting from the publication date and the existing employees will remain covered under Federal Law No. (7) of 1999.

Pensioners currently receiving benefits under previous laws will continue to be covered by those laws. Individuals who have received end-of-service bonuses under the older laws will also remain covered, even if they embark on new employment after the issuance of the new Federal Decree Law No. (57) of 2023.

The monthly contribution structure for the insured is now stipulated at 26% of their contribution account salary, with the insurer bearing 11%, the employer 15%, and the government 2.5% for Emirati nationals in the private sector with a contribution account salary below Dh20,000.

To standardize rules across government and private sectors, the pension calculation mechanism is based on the average contribution account salary of the last six years of the subscription period. The law permits the consolidation of previous service periods for any employer covered by the new law, including service before acquiring UAE nationality.

The minimum age for entitlement to a retirement pension is set at 55 years, with a minimum subscription period of 30 years. Working mothers are granted flexibility, allowing them to apply for retirement pension entitlement at a younger age and with a shorter subscription period.

Monthly subscription salary components are specified for the government sector, while the private sector wage is determined by the employment contract, with a monthly subscription amount not less than Dh3,000 and not exceeding Dh70,000.

The law permits the purchase of a nominal period of adjoining service, with conditions based on actual service periods and age. Insured individuals can request the purchase of up to five years, depending on their years of service.

The law introduces equality between insurers in the government and private sectors, allowing pensioners with a subscription period of 30 years to combine pension with salary, irrespective of their value.

Pension payments will be suspended if a pensioner joins a new job covered by the new law, with compensation equal to or greater than the pension amount. The GPSSA is authorized to establish executive regulations and conditions for employers and self-employed individuals under this new law, subject to approval from the Minister of Finance. The GPSSA is also empowered to formulate the necessary executive regulations for the application of the GCC Insurance Protection Extension Program.

Conclusively, the new Federal Decree Law, focuses on its objectives, applicability, and key provisions related to financial contributions and benefits.