End of Service Benefits (EOSB) plans show commitment by an employer that they are willing to reward their staff. They are especially suitable for executives and globally mobile employees.
What are End of Service Benefit and Employee Savings Plans?
Employee savings plans are a form of benefit offered by employers to retain and reward staff by providing additional incentives over and above the general market. Such plans allow your organisation to better position yourselves regarding talent retention, and increase employee wellbeing, whilst also providing enhanced benefits against your competition.
End of Service Benefit Plans (often referred to as Gratuity Schemes) are particularly important to employers in many parts of the Middle East given it is mandatory for companies to pay an end of service benefit to expat employees on leaving service, whether retirement, leaving voluntarily, redundancy, or death.
Under current Gulf States' laws all non-national company employees (expats) who have provided more than one-year continuous service to an employer are entitled to a lump sum payable at the end of their service.*
Many employers also offer additional employee benefits over and above the statutory requirements. These types of arrangements can be operated through employee benefits plans which can be tailored to meet your company’s needs and objectives. The two most typical benefits are:
- Additional members’ contributions (in the form of employee savings plans)
- Long term incentive plans
Why choose Praxis for your EOSB solution?
We work directly with companies and their advisers to provide a tailored solution, establishing a special purpose trust, with the aim of providing security and control with enhanced flexible employee benefits.
Our Abu Dhabi branch is regulated by the ADGM Financial Services Regulatory Authority and has been providing tailored local gratuity schemes since 2016, including for some of the largest local government entities.
Praxis End of Service Benefit solutions can be provided with an employee savings plan built in. This means you can allow your employees to access institutional investment offerings at competitive costs.
Advantages to employers
- Tailored solution to meet your employer requirements
- End of Service Benefit is legally separated from your company’s operational assets and balance sheet
- Praxis End of Service Benefit Plans adhere to international accounting and reporting standards
- The plan can be used to attract talented staff, enhance employee loyalty, and reward service
- You can appoint your preferred investment manager (subject to due diligence) or work with one of our appointed managers and control the level of investment risk to fit your company’s and plan members’ objectives.
- You can choose which additional benefits to offer your employees
Advantages to employees
- 24/7 secure online access via our portal to view valuations and plan information
- Be assured that your employer’s statutory obligation and rights to protect both the company’s and your contributions are protected
- If the additional members or long-term incentive plans are offered, upon leaving service these sums can be paid to you as a cash lump sum in any major currency, or remain invested within your account making the plan truly portable
The option to create your own investment portfolio from over 100 self-selectable assets, from annual investment charges as low as 0.03%.
*Certain exemptions apply in some free zones where money purchase regulations have been enacted.
