Important clarification from pensions regarding the purchase of nominal service periods – UAE – News and reports

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The General Pensions and Social Security Authority confirmed that the purchase of nominal service periods is not for the purposes of fulfilling the period determined for the entitlement of the retirement pension, but rather to improve the pension rate upon retirement. Therefore, one of its most important conditions is that the insured has fulfilled the period eligible for retirement entitlement, which is (20) years.

The Authority clarified that the nominal service periods are considered non-actual periods that the insured can purchase in order to add to the actual periods of service to increase the value of his pension upon retirement, and the man has the right to purchase 5 years that gives him an increase in the pension by 10%, while the woman has the right to purchase a maximum of 10 years that gives her an increase in the pension by the rate 20%, indicating that this service is optional and therefore any of them can buy any number of permitted years and not buy the entire period.

She pointed out that the purchase would be within the years qualifying for reaching the 35-year service period, which is the period that qualifies for the maximum pension.

For example, if the actual service period of the insured person or insured is 33 years, then they may only purchase two years to complete the period eligible for the pension to the maximum, despite the fact that the law has permitted them to purchase a period longer than that, and accordingly, any purchase for a period of service The period of actual service should not exceed 35 years.

She indicated that the conditions for purchasing this period are that the insured be in his job, and that he submits the purchase request before the end of the service, and that the service period at the time of purchase reaches (20) years, and therefore the purchase cannot be made if the insured is entitled to the pension for (15) years of service. .

She said that the equation for calculating the purchase cost is based on multiplying the contribution calculation salary on the date of submitting the purchase request x (20)% is the contribution calculation salary for the insured and the employer x the period to be purchased in months and days.

For example, if the salary of an employee’s contribution calculation is 20,000 dirhams and wants to buy 5 years, the calculation equation is 20,000 (Contribution Calculation Salary) x 20% (the full contribution percentage for him and for the employer) x 60 (the period to be purchased in months and days) then it will be The result is 240 thousand dirhams.

It indicated that the purchase cost is to be paid in one payment or in installments, so that the insured, in the event of installments, pays a first cash payment equivalent to 50% of the total purchase cost, and the rest of the amount is to be paid in monthly installments of not less than a quarter of the monthly salary provided that the installment period does not exceed four years The insured reaches the age of sixty, whichever comes first.

It indicated that if the service of the insured ends without paying the full costs, the purchased periods are calculated in proportion to the amounts actually paid, and in the event that the service of the insured ends with death before paying the full costs, the remaining purchase installments will continue to be deducted from the pensions of the beneficiaries.

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