GPSSA introduces a new pension law

The General Pension and Social Security Authority (GPSSA) has issued a new pension law no. (57) of 2023 for Emiratis joining work for the first time effective October 31, 2023 with any employer affiliated with the GPSSA.

Entities affiliated with the GPSSA include UAE-based federal and government sector employers, with the exception of government entities in Abu Dhabi and Sharjah, as well as private sector employers, with the exception of entities situetd in Abu Dhabi. Entities whose headquarters are in Abu Dhabi, including their branches in other parts of the UAE, are subject to the Abu Dhabi pension law.

The new law is tabled below:

The GPSSA has provided employer’s (Government and Private sector) the below payment options for the contribution due from October 31,2023:

• Continue contributing at the current rate of 20% and pay the balance of either 6% or 3.5%, as applicable, on January 01, 2024 for the three months
• Pay the monthly contributions from October 2023 onwards at 26% or 23.5%, as applicable.

There will be no penal charges on account of this delay until December 31, 2023.

Insured individuals who presently contribute to the GPSSA prior to October 31, 2023 will continue to be covered by the provisions of the current Federal Law No. (7) of 1999 for pension and social security and its amendments. In other words, should an employee decide to move to a new employer after the law’s effective date, the provisions of this new law will not apply to them.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.