More than 1,000 companies enrol in DIFC's new savings scheme
The majority of eligible organisations signed up for the Dews plan before the revised April 30 deadline
Eighty-five per cent of eligible organistions in Dubai International Financial Centre have signed up for the free zone’s new Employee Workplace Savings (Dews) plan.
This represents 1,100 DIFC-based companies, which enrolled before the revised deadline of April 30, according to Zurich Workplace Solutions, the administrator of the plan. Of the 1,100 businesses, 750 have made gratuity payments for their employees into the scheme, with the remainder due to complete the requirements soon. The total number of employees now signed up to the plan comes to 16,000.
“We have been coordinating closely with the DIFC and the Trustees (Equiom), to help smaller companies who have made significant efforts to comply but have been unable to enrol in time due to factors outside their control. A number of these organisations will complete the remaining formalities in the next few days,” says Reena Vivek, senior executive officer of ZWS.
The Dews plan, which replaces the end-of-service gratuity with a defined contribution investment scheme, came into effect on February 1. In March, DIFC extended the deadline to enrol and initial contribution dates to help companies cope with the effects of Covid-19. While employers were initially given until March 31 to register for Dews or an alternative qualifying scheme, and until April 21 to make their first contribution payments to cover the February and March payroll, those dates were then extended until April 30.
ZWS said it has responded to over 2,500 calls and live chats and more than 4,000 emails over the past week as companies attempted to hit the new deadline.
Even with the extension, ZWS said there was "a significant last-minute rush" for enrolment with over 200 companies signing up in the final week of April, and about 350 companies missing the contribution deadline.
Under the DIFC Employment Law, eligible employers that fail to comply with the deadline could be hit with a $2,000 penalty “per employee per breach”.
ZWS said it is working with some companies who started the process ahead of time and should have this completed in the next few days.
“We will be reporting the status of enrolments to the DIFC Authority and they will be making the decision based on any exemptions (already granted or underway) on whether any fines would be imposed,” the company added.
ZWS said it will now focus on supporting employers making contributions and help them set up systems for employees who want to make voluntary contributions or transfer their accrued gratuity into the Dews plan.
“Under a recent directive issued by the DIFC, employees have the benefit of end-of-service gratuity payment protection if salaries are reduced after March 1 2020 and if they choose to transfer any accrued gratuity into the Dews plan," it added.
The scheme requires employers to contribute an amount equal to 5.83 per cent or 8.33 per cent of an employee’s wage, depending on length of service, on a monthly basis to a trust-administered fund. While Equiom serves as the master trustee for the Dews plan, global consultancy Mercer is the investment adviser.
To date, no qualifying alternative scheme has been approved.
Updated: May 5, 2020 03:55 PM