Experts welcome new saving investment fund scheme

Abu Dhabi: The proposed establishment of the saving investment fund, which would replace the traditional end-of-service gratuity for expatriates working in both the private and public sectors is a good step in the right direction, experts said on Tuesday.

“The new scheme will inculcate the habit of saving among people and it will also be a very good thing if the worker goes back to his home country and has some money as assurance to take along,” Y. Sudhir Kumar Shetty, president of UAE Exchange, told Gulf News.

Elaborating further, he said expatriate workers in the UAE do not save money and send the entire amount to families back home in their countries without giving much importance to savings.

“With the new scheme, workers will be induced to save and also will have a reasonable return on their investments in the form of interest or whatever. It will also benefit middle and upper middle class people living in the country.”

Benito Seelan, human resource consultant at Dubai-based The Thought Factory, also welcomed the decision and said it will have a positive impact on the economy as well as on the individual.

“Majority of people will welcome the security a fund like this provides along with the positive impact this will have on the economy and the option to choose to follow the plan will help people ease into it better,” he said, adding that returns on savings will be more with the implementation of the new scheme.

It is not known when the new investment fund would be set up but the study suggests that a monthly amount of the expatriate employee’s salary would be deducted and deposited by employers in the proposed fund, and then be paid as a lump sum to employees at the end of service or retirement, along with the expected return on their investment in the fund.

Specialised fund-managing institutions are expected to run the proposed saving investment fund, which will include employees’ monthly deductions and the additional voluntary contributions, to invest in an optimal way that ensures good financial returns for the employees.


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