Frequently Asked Questions
Q: What is the Trustee's role?
The DEWS Master Trustee's primary function is to act as legal owner of the contributions made by the employing companies, whilst the beneficial interest lies with the underlying members (employees). They key benefit to employees is having the comfort of knowing that once contributions are made they are no longer controlled by their employer, but rather an independent trustee that is accountable to the Regulator and there to protect the members interests throughout.
The Master Trustee will appoint and oversee the administrator of the scheme whilst working with their appointed Investment Advisor to ensure that the investment options available to scheme members are performing appropriately and that the necessary information is provided to the Regulator and key stakeholders in accordance with the regulations and plan documentation in place.
Q: What is the Administrator's role? ?
Zurich, as Administrator, will facilitate the day-to-day management of the DEWS plan. We will be responsible for
- Employer and employee enrolment
- contribution collection,
- allocation to member accounts and execution of investment instructions,
- maintainance of member records and
- management of withdrawals.
In addition, we will administer new joiners to the scheme, leavers and changes to contribution rates as notified by employers. We will also provide support to the Master Trustee, assist in their governance role and the requirement to provide regular reports to the DIFC Supervisory Board.
Zurich will provide full support to employers and employees through an online portal, a DIFC based contact centre and a specialist team of relationship managers.
Q: Who provides ongoing oversight and governance of the scheme?
There are several levels of oversight and governance for the DEWS plan. All parties to the DEWS scheme (Trusee, Administraor and Financial Advisor) will be regulated by the Dubai Financial Services Authority. In addition
- A Supervisory Body will be stabilished to oversee and review the governance and non-regulated duties of Equiom, the trustee.
- The trustee (Equiom), will oversee the Scheme and ensure that it is operating in accordance with the Scheme documentation (Trust Deed and Scheme Rules). Equiom is a dual-regulated entity and will also be regulated by the Isle of Man Financial Services Authority.
Q: What is the Supervisory Board?
The DIFC Supervisory Board will be a statutory corporation established by the President of the DIFC. It will oversee the establishment of the DEWS Master Trust, the scheme rules and the appointment of its trustee and administration service provider.
The DIFC Supervisory Board will provide oversight of the scheme’s governance and commercial aspects that are not subject to regulatory supervision. It will be comprised of DIFC Authority representatives, employer and employee representatives as well as independent chairman.
Q: Can an employer deposit the accrued end of service benefit up to 31st January 2020, without the employee’s consent?
The employer can choose to transfer the accumulated benefit without employee consent. This will be held in the plan, as a pooled fund, under the employer’s name and they can decide how the amount is to be invested. The employer will still be liable for settling each employees accrued EoSB entitlement when they leave service and they can take withdrawals from the fund to achieve this.
Q: Our payroll provider is not registered in the DIFC nor enrolled in DEWS, can they make contribution payments on our company’s behalf?
No, unfortunately we are unable to accept contribution payments from payroll providers who are not registered in the DIFC and enrolled in DEWS.
Q: Our payroll provider is registered in the DIFC and is enrolled in DEWS, can they make contribution payments on our company’s behalf?
Yes, however they will be required to complete our ‘Third Party Payment Application Form’ which is available in the ‘Documents’ section of our website zws.zurich.ae, as well as providing all the necessary supporting documentation outlined within the form, which will require your input.
Once we have received the required documentation, you should then update the bank account details in the DEWS online portal to reflect the bank details of your payroll provider.
Q: Our company contributions will be paid from a bank account held by another entity in our group that is registered outside of the DIFC. Is this acceptable?
We are able to accept payments from another group entity upon receipt of proof of the relationship between the two entities, e.g. through a company or organisational structure chart. The company structure chart must be signed by the DEWS nominated authorised signatory and sent to [email protected]
Enrolment And Contributions
Q: What will be the mandatory employer contributions?
Employers need to make a mandatory contribution into the plan and the minimum contribution amounts will depend on the length of service. The minimum contribution rates as a percentage of basic salary are:
- for members with less than 5 years service - 5.83%
- for members with 5 years service or more - 8.33%
Each member's tenure is calculated from the day they start employment.
For the purpose of simplicity and cost neutrality, the minimum employer contribution rates under DEWS have been designed to broadly match minimum accrual rates under the existing end-of-service benefit system.
Q: Can employees make voluntary contributions into DEWS?
Yes, employees can choose to pay a regular amount or percentage, as well as a lump sum or one-off payment, as voluntary contributions into the DEWS plan. They can do this through salary deduction and this process will be facilitated by employers. There is no minimum contribution amount and the maximum is 100% of total salary in that payroll period. Voluntary contributions will be automatically invested in the DEWS Default Low/Moderate Fund unless employees have made an active investment choice prior to investment of contributions.
Q: Will employers be required to make any changes to their existing HR system?
Employers will need to make necessary changes to systems in order to
(a) make the mandatory contributions for eligible employees
(b) deduct the amounts relating to employee voluntary contribution from employee payroll
(c) upload the monthly contribution files
(d) transfer the relevant amount to the bank account of the DEWS master trustee for investment
Employers and Employees will be able to log into the DEWS system to track contributions, investments, portfolio valuations and place instructions for withdrawals.
Q: To which bank account would the DEWS contribution be made?
The DEWS contribution will be made to the account of the Master Trustee, Equiom. This account will be in USD and is with Standard Chartered Bank UAE. Each employer will be provided with the information of the bank account along with a dedicated Virtual Bank Account Number (VBAN) when they enrol into DEWS.
Q: Who should make the voluntary contributions?
If voluntary contributions have been requested by the employee, the contribution amount should be deducted by the employer from the employee’s salary and transferred into DEWS on the employee’s behalf.
Fees And Charges
Q: What are the overall cost associated with DEWS?
The DEWS Plan has a charge that ranges between 1.26% and 1.33% based on the fund (conventional) that is selected. The fee for the default fund is set at 1.33% of the assets under administration.
The Sharia funds will attract a higher charge and information regarding the same will be available in the investment guide.
Q: What is Automatic Exchange of Information (AEI)?
Automatic Exchange of Information (AEI) is a global tax standard that governs how tax authorities of participating countries freely and automatically exchange information with one another. The information shared under AEI relates to taxpayers' financial accounts held in jurisdictions other than the individual’s country of tax residence. AEI exists to enforce transparency and to reduce global tax evasion.
Q: Why do I need to provide AEI information?
The regulatory framework of the DEWS Plan is governed by two regulators; the Dubai Financial Services Authority and the Isle of Man Financial Services Authority. AEI is a global reporting standard and in order to ensure the DEWS Plan is compliant and meeting all regulatory obligations, we have a legal responsibility to identify the tax status of each individual account holder. This must be a self-certification completed by the individual.
Q: I do not have AEI information; can I complete this later?
No, Zurich and Equiom require this information at the point of which you join the plan. Once your employer has registered you into the plan, you will receive an email with your credentials to our online portal. Once you have logged in you will then be asked to answer up to five questions regarding your current tax obligations.
Q: What should I do if the country I am tax resident in does not issue tax reference numbers?
We are aware that not all countries issue a personal tax reference number. However if you are tax resident in one of these countries, you will still be required to complete the form. In these instances when you select the relevant country please populate the field Tax Reference type and Tax Reference Number ‘No TIN issued’.
Q: Where can I find my tax identification number?
A Tax Identification Number (TIN) is an identifying number used for tax purposes. Most countries/jurisdictions issue these to identify their taxpayers and facilitate the administration of their national tax affairs. Each country/ jurisdiction will have its own structure (combinations of letters/numbers/symbols and digit length) and refer to it by its own terminology such as National Insurance Number, Social Security Number, Employer Identification Number or Personal Identification Number. TINs are different in every country. For example, in the UK, individuals have a National Insurance (NI) number, and companies have a Corporation Tax number. The below link may be useful in helping you identify yours: https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers/
Q: I am resident in the UAE and don’t pay tax?
Individuals in the UAE aren't taxed on their personal income. That means that if you’re soley tax resident in the UAE you won't have to pay tax to the UAE authorities on your earnings from work, or other income streams. In this scenario you would answer the question “Are you tax resident in any other country other than the UAE?” As No.
Funds and Investments
Q: Do employees have the ability to switch between investment funds?
Employees will have full control over their DEWS savings. They can switch from their default fund and choose to invest in other funds that are more suited to their risk profiles. They can do this via the DEWS portal.
Leavers And Withdrawals
Q: How and when will benefits be paid under the new system?
Benefits from DEWS will be paid to the employee when the leave their DIFC employer.
The payment will be made directly to the employee's nominated bank account. Alternatively, the employee can defer taking the benefit and remain invested in the scheme until a later encashment date.
Employees may also be entitled to a separate payment from their employer in respect of end-of-service benefit entitlement built up in relation to service prior to the introduction of DEWS on 1st February 2020.
Q: How will an employer notify DEWS when an employee is leaving?
When an employee is leaving, the employer can update the Exit date in the DEWS Contribution file, and when this file is uploaded it will automatically trigger the leaver process.
Q: Can employees withdraw an amount from DEWS during employment?
Employees will be able to withdraw their accumulated balance when they leave the service of their DIFC Employer. Currently the scheme rules and the DFSA regulations do not provide for the withdrawal of voluntary contributions whilst the employee remains in service. This is something that is under consideration for the plan, and we will keep you updated should this position change in the future.
Q: Can an employee withdraw their voluntary/booster contributions at any time?
Currently the scheme rules and the DFSA regulations do not provide for the withdrawal of voluntary contributions whilst the employee remains in service. This is something that is under consideration for the plan, and we will keep you updated should this position change in the future. The core benefit relating to end of service benefits (statutory minimum and accrued EOSB transfers with consent) paid into DEWS by employers will only be accessible upon termination.
Q: Why change the existing system?
The DIFC Employment Law, Law 4 of 2005, currently requires employers to provide an end-of-service benefit for expatriate workers based on years of service and final basic salary – This is know as a defined benefit (DB) entitlement.
However, over the last 20 years, globally, corporates have adopted the defined contribution plans (DC) to avoid the risks associated with open-ended defined benefit plans.
The DIFC Authority has recognised the need to reform its Employment Law, to reduce such risks on employers and to ensure that members have access to a level of leaving service benefits.
This shift will help DIFC offer benefits that meet international standards. This will also become a key factor for retaining and attracting talent.
Q: Are UAE or GCC national need to be included in DEWS?
DEWS is a workplace savings plan for expatriate employees working in the DIFC. It will replace the current end-of-service benefit entitlement from 1st February 2020. The scheme will not include the UAE nationals or GCC nationals who are accruing a social security benefit. However, they could choose to enrol and make voluntary contributions.
Q: What will happen to the End of Service Gratuity (EoSG) accrued up to the Changeover Date?
At the changeover date, employers have the following choices with regard to their accrued EoSG:
1) You can continue to manage it as you have done in the past. In this case, at service termination the employer will be liaible to pay the employee the accrued EoSG in line with the service period as at the changeover date and last drawn salary.
2) Employer can transfer the accued EoSG with employee consent into DEWS: The employer can get written consent from the employee and transfer an agreed amount, that is no less than the entitlement calculated by reference to a termination payment under DIFC Employment Law, into the DEWS Plan. In doing so, the employer are no longer liable for the payment of the accrued EoSB to the employee when employment is terminated, irrespective of any future salary increases and/or length of service. In addition, the employee accepts the ongoing investment risk.
3) Employer can transfer the accrued EoSG without employee consent: The employer can also choose to transfer the accumulated benefit without employee consent. This will be held in the plan, as a pooled fund, under the employer’s name and they can decide how the amount is to be invested. The employer will still be liable for settling each employees accrued EoSB entitlement when they leave service and they can take withdrawals from the fund to achieve this.
Q: Who are exempted from being subject to the changeover from the existing Gratuity Payment regime to a Qualifying Scheme (such as DEWS)?
Exempted employees include:
(i) GPSSA citizens
(ii) Art 4(2) Employees (Secondment, Govt employees, Presidential exemption)
(iii) under notice on 01/02/20 or under a fixed contract that ends within 3 months
(iv) Equity Partners.
Those who are not in receipt of a basic salary do not have to enroll into DEWS, but can opt in. It also means those on unpaid leave, sabbatical etc. are not entitled to mandatory contributions.
Q: If the employee joined DIFC employer on 01 Oct 2019, so is he eligible for any gratuity as on 31 Jan 2020 to be stated as accrued End of Service Gratuity? What if he leaves the employer on (a) June 2020 (i.e. before 1-year completion) and (b) June 2020 (i.e. after 1-year completion)?
If he leaves employment before completion of one year, he would not be eligible for End of Service Gratuity under the old regime but would receive the payment that has been made into DEWS from 1st February.
If he leaves employment after completion of one year, he would be eligible for End of Service Gratuity under the old regime and should be paid that amount for the period of service prior to 1st February but calculated on the last drawn salary. He would additionally be paid the amount accumulated under DEWS.
Q: If an employee joins in June 2020 should the employer start contributing to his fund from April 2020 onwards? If yes, when he leaves before completing a year, will he still be eligible for gratuity accumulated in his account?
Under the new employment law, the one year wait period for End of Service Gratuity eligibility has been removed. Therefore, the employer should start contributions to DEWS for any employee joining the company after 1st February 2020. So in the above example, the first contribution for this employee starts from May 2020.
The only exception to this rule would be employees in probation periods. If the employee is in probation, the employer can choose not to make the payment until probation is completed. If probation is successfully completed, the employer has to make the back payment from the start date. If the probation is not successful, then no payment is due. If the employer made a payment during probation and the probation is not successful, the employee will still receive that payment from DEWS. Examples:
a) Employee starts probation on 1st June for 3 months. Employer makes no contribution. Employee is confirmed on 1st September. Employer should make contribution for June, July and August in Sept.
b) Employee starts probation on 1st June for 3 months. Employer makes no contribution. Employee is not confirmed after probation. Employer need not make any payment to the employee.
c) Employee starts probation on 1st June for 3 months. Employer makes monthly contributions to DEWS. Employee is not confirmed on 1st September and employment is terminated. DEWS will pay the accumulated contribution to employee.