Equiom’s Corporate Savings, Pensions and End of Service team works closely with local and international pensions and savings plan administrators, providers and advisors to deliver leading employee savings/pension solutions all over the world. We chatted to Chris Cain, Client Services Director – Middle East (DIFC), Fiona Noon, Client Services Director (Isle of Man) and Ben McLean, Senior Manager (Isle of Man) to find out what is high on the team’s agenda.
Where are you based?
Chris: I’m based in Equiom’s Dubai International Financial Centre (DIFC) office in Dubai. I provide on the ground support to companies in the DEWS (DIFC Employee Workplace Savings) plan for which Equiom is Master Trustee, as well as companies in the UAE and wider MENA region for whom we provide end of service plans. The rest of the team are based in the Isle of Man as this is where the plans are administered. Prior to joining Equiom, I worked for Zurich International for 22 years. The majority of that time was spent on the administration relationship management and distribution of their award winning Corporate International Pension Plan product with responsibility for Middle East and Asia clients.
What is an ‘End of Service Gratuity’ benefit?
Chris: End of Service Gratuity (EOSG) is a statutory severance pay across many Middle Eastern jurisdictions - similar to retirement savings or a pension scheme provided by employers for expatriate workers in the region. It has been running for more than 40 years. However, earlier this year the DIFC launched the DEWS plan - a funded workplace savings plan for expatriate workers to replace the existing, outdated End of Service Gratuity system. This announcement marked a significant step in labour law reform for the DIFC which has its own Employment Laws, separate to the federal laws of UAE.
What is different about DEWS?
Ben: DEWS is a Defined Contribution (DC) savings/pension model akin to developed economies in Western countries such as the UK and US. It’s mandatory for all organisations based within the DIFC to be enrolled into a qualifying scheme such as DEWS, with the ability to opt out in only very limited circumstances. Essentially, it helps employers to reduce the need to fund for a future lump sum liability as it’s now effectively paid and settled monthly. Employees are able to view their EOSG build up, choose how it is invested and they can also use the new DC arrangement to make voluntary contributions from salary deduction to accelerate their overall value.
Chris: We’re already seeing interest from other free zones and countries and it’s widely expected this approach will become the ‘new normal’ and sweep across the UAE and GCC in the coming years, signalling the end of EOSG as we know it. We’ve recently started working with numerous companies across the wider MENA regions wishing to set up similar arrangements.
What is the highlight of working on the DEWS plans for Middle Eastern employers and employees?
Fiona: Equiom is literally leading the reform of this in the Middle East and to personally be part of it is something really special. I’ve been involved with DEWS from the start and have had considerable input on how it’s rolled out, working closely with Zurich (the administrator), Mercer (the investment advisor) as well as the regulator. A year ago we were just starting the pitch process so to see where we are today and the growth potential is extraordinary. As trustee, it’s rewarding being able to share our previous knowledge and experience working with Isle of Man registries, and being able to shape those for the DIFC and help implement the changes.
Chris: The market has been talking about a product like DEWS for some time but it’s only now being delivered. Equiom is helping to change the benefit and pension framework in the Middle East and I’m humbled to be part of this movement.
Ben: It’s been fantastic to be involved in such a game changing product for the region. Having the opportunity to provide input into all aspects of the project from the legal and regulatory framework right through to development of systems and drafting of scheme documentation, it’s been an eye opener. From an Isle of Man perspective, it has well and truly put us on the map in the GCC!
What is your key focus right now?
Ben: I’m very much concentrating on the DEWS on-boarding process, answering any queries from employers and employees in terms of the scheme and its benefits. I’m also helping to educate the team on the ground in the DIFC.
Chris: DEWS is really creating noise in the region and I’m getting a lot of questions around the likely direction of the market. I’m leveraging these opportunities to approach new contacts and existing clients to see if we can help them in any other way, in turn spreading awareness of Equiom within the market. The Covid-19 crisis has further highlighted the need for EOSG funds to be ring fenced and I’m seeing a lot of interest from a range of employers.
Ben: This solution isn’t limited to the Middle East – in fact we offer similar solutions to clients all over the world. Many companies have contacted me to ask how they can replicate DEWS in other regions. It’s great to know that we are making a difference in the region with such an innovative and futuristic product.
What other EOSG plans are you working on?
Chris: We are discussing the benefits of workplace savings plans with companies outside of the DIFC. It’s not a ‘one size fits all’ approach – there are differing ways that companies approach the funding, each with varying positive impacts. Watch this space!
Equiom offers a variety of pension and end of service plans, from simple trust arrangements to complex multi-company structures. If you wish to find out more, please contact Chris Cain or Ben McLean.