Almost two-thirds of UAE employees (58%) would more likely stay with their employer or join another company if provided a retirement savings plan

Only half of employees believe their employer has accrued the funds required to pay their end of service gratuity

Dubai, UAE; January 13, 2015: Providing employees with a formal retirement savings plan will significantly improve a company's ability to attract and retain the best staff, according to research released today by Zurich International Life.

In a survey of 1,000 UAE residents, almost two-thirds of respondents (58%) said that they would be more inclined to stay with their current employer or join another company if they were provided with a corporate retirement plan. Western expat employees (71%) were the most inclined to remain loyal to their employer if they provided a retirement saving scheme.

The results will make interesting reading for companies across the UAE that are experiencing intense competition for the best talent. The strengthening economy, greater investment and the development of projects such as Expo 2020 are increasing demand for highly skilled workers in the UAE, which are in short supply across the Emirates.

What employee benefit would make you more inclined to stay with your current employer?

1. Retirement savings plan (58%)

2. Life insurance (35%)

3. Critical illness cover (31%)

4. None of these (21%)

Respondents could select more than one option

The research also found that other employee benefits would also help to retain and attract top talent. The provision of life insurance would encourage 35% of UAE employees to either stay with their current employer or join another company. Meanwhile, critical illness cover would be valuable loyalty tool among 31% of employees.

According to UAE Labor Law, employers do not have to provide retirement saving schemes for their employees. Instead, employers must provide an end of service gratuity ('gratuity') on termination of employment if the employee has completed one or more years of continuous service. The gratuity payout is dependent on length of service and is linked to the basic salary.

There is also no legal obligation for a company to accrue the funds required to payout their employees' gratuity liabilities. This is leading to many employees to lack confidence in the system with only half (53%) believing that their employer has saved the funds required to pay their gratuity

The alternative is for companies to set up a corporate retirement savings plan for their employees. It can incorporate the existing gratuity obligation but built within a more structured savings vehicle that can act as a retirement fund and more effective employee retention tool.

Peter Cox, Head of International Pensions at Zurich International Life, said that the provision of corporate retirement savings plans could be a "secret weapon in the quest for the talent".

"Our research clearly shows that employees want their employers to provide a retirement savings plan as the end of service gratuity is not an adequate retirement savings vehicle. Employers that listen to this demand will find they are rewarded with greater loyalty.

"We have seen some forward-thinking companies set up savings plans for their employees in recognition of the need to move beyond a simple promise to pay a gratuity to providing a true employee benefit. It has enabled these companies to become 'employers of choice' with significantly improved recruitment and retention efforts."

What benefit would make you more inclined to stay with your employer or join another company in the UAE by nationality



What is the End of Service Gratuity?

The End of Service Gratuity is a payment based on an employee's last basic salary and the length of service. It does not take into account any allowances such as housing or school. However, anyone receiving a guaranteed or regular commission may have this included in the calculation.

Employees must complete 12 month's service to qualify. They then receive 21 days' salary for each year of service. This increases to 30 days after five years of service. The amount paid out is reduced for employees that resign before five years has passed. Those that work between one and three years are entitled to one-third of their payout and those that work between three years and five years, receive two-thirds. The maximum possible payout is two years' salary.

About Zurich Insurance Group:
Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With more than 55,000 employees, it provides a wide range   of general insurance and life insurance products and services. Zurich's customers include individuals, small businesses, and mid-sized and large companies, including multinational corporations, in more than 170 countries. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.

For further information, please contact:
Sean McAllister
Head of Communications, Middle East
Zurich Insurance Group
Direct: +971 4 455 7552
Mobile: +971 56 175 3640
Email: sean.mcallister@zurich.com

© Press Release 2015