Operational and Compliance Framework Under UAE’s 2023 Pension and Social Security Law for Emirati Nationals

The UAE’s 2023 Pension and Social Security Law, together with its Executive Regulations, represents a comprehensive reform of the country’s pension and social security framework for Emirati nationals. Beyond contribution rates and pension calculations, the law sets out detailed rules governing administration, employer obligations, beneficiaries’ rights, penalties for non-compliance, and the mechanisms through which pensions are claimed, combined, or disputed. These provisions are particularly relevant for employers and HR professionals responsible for ongoing compliance and end-of-service processes.

 

The General Pension and Social Security Authority (GPSSA) is the central authority responsible for administering the pension system under the 2023 law. GPSSA oversees the registration of employers and insured Emirati employees, the collection of contributions, the assessment of pension and end-of-service entitlements, and the payment of pensions and related benefits. All formal interactions under the pension regime, including registrations, termination notifications, pension claims, and grievances, must be carried out through GPSSA in accordance with the procedures set out in the law.

 

The law imposes clear and time-bound obligations on employers. Employers must register eligible Emirati employees with GPSSA within thirty days of the commencement of employment and must ensure that pension contributions are calculated accurately on the contribution-account salary prescribed by law. Upon termination of employment, the employer is required to notify GPSSA within fifteen days and submit the relevant end-of-service documentation. Employers must also respond promptly to any request from GPSSA for payroll records or supporting documents required to assess contributions or benefits.

 

To ensure compliance, the Executive Regulations impose specific financial penalties on employers who fail to meet their obligations under the pension system. These penalties apply automatically and accrue daily, making timely compliance critical.

 

Where an employer fails to register an eligible Emirati employee with GPSSA within the prescribed period, the employer is liable to a penalty of Dh200 per day for each unregistered insured employee, calculated from the date on which registration was required. A similar penalty of AED 200 per day applies where the employer fails to notify GPSSA of an employee’s termination of service within the statutory time limit.

 

If an employer fails to provide documents, payroll records, or information requested by GPSSA for the purpose of calculating contributions or benefits, a penalty of Dh100 per day per insured employee may be imposed until the information is supplied.

 

In addition to fixed penalties, delayed payment of pension contributions attracts financial charges. Unpaid contributions are subject to an additional amount calculated at 0.1 per cent per day of delay on the outstanding contribution amount. In certain cases, a further administrative penalty of up to 10 per cent of the unpaid contributions may apply. The law caps the total additional amounts so that they do not exceed the value of the original unpaid contributions.

 

The law also clearly regulates how pension benefits are distributed upon the death of an insured person or pensioner. It allocates fixed percentage shares to eligible beneficiaries to ensure predictability and financial security for dependants.

 

Where a pension becomes payable following death, the distribution is as follows:
• Spouse (widow or widower): 40 per cent of the pension
• Children (collectively): 40 per cent of the pension, shared equally among eligible children
• Parents (collectively): 20 per cent of the pension, shared equally between them if both are alive

 

Eligibility for children depends on statutory conditions, including age, marital status, and educational enrolment. Daughters may continue to receive benefits subject to marital status, while sons’ entitlement generally ends upon reaching the prescribed age unless they remain in full-time education or meet other qualifying conditions. Parents must satisfy dependency requirements to qualify as beneficiaries.

 

Before approaching the courts, insured persons or beneficiaries must first submit their claim or grievance to GPSSA. The regulations establish an internal grievance process with defined timelines, after which a claim may be deemed rejected if no decision is issued. Only after exhausting these administrative remedies may court proceedings be initiated, and claims are subject to statutory limitation periods.

 

For employers and HR professionals, familiarity with these operational aspects is critical to ensuring compliance, managing risk, and supporting Emirati employees throughout the employment lifecycle. Given the financial and legal consequences of non-compliance, professional legal advice is often advisable when dealing with complex pension matters.

 

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