DIFC delays roll-out of new saving scheme amid Covid-19

The free zone has extended the enrolment and initial contribution dates for its Dews plan

Dubai International Financial Centre aims to triple its size by 2024. Sarah Dea / The National

Dubai International Financial Centre extended the enrolment and initial contribution dates for its new Employee Workplace Savings (Dews) plan, to help companies cope with the effects of Covid-19.

The Dews plan, which replaces the end-of-service gratuity with a defined contribution investment scheme, went into effect on February 1. While employers were initially given until March 31 to enrol in 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 have now been revised.

“In context of the current Covid-19 developments and the resulting impact on businesses, DIFC Authority and the Dews Supervisory Board reviewed the deadlines for enrolment and payment of the contributions into Dews,” said Reena Vivek, senior executive officer at Zurich Workplace Solutions, the Dews administrator.

Under the revised timeframes, the enrolment deadline has been extended until April 30 and the contribution deadline for the February and March payroll moved to April 30.

“Following this, all future monthly contributions are still required before the 21st of the month following the payroll month, ie April contributions should be paid by the 21st of May and so on,” said Ms Viviek.

The coronavirus pandemic has infected about 740,000 people across the globe and killed over 35,000, according to Johns Hopkins University. The outbreak has hammered the global economy and crimped growth as countries lock down their populations to control the spread of the disease. To date, more than 156,000 have recovered.

In the UAE, shutdown directives have seen employees working from home, flights cancelled, and schools, malls and entertainment facilities closed.

To date, almost 65 per cent of organisations in DIFC, which comprises 840 companies, have enrolled into Dews, which equates to almost 15,000 employees.

“Unforeseen events such as Covid-19 point to the importance of savings plans, which can provide financial security in times of uncertainty and offer much needed reassurance to employees,” said Ms Vivek.

Equiom is serving as the master trustee for the Dews plan, while global consultancy Mercer is the investment adviser.

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.

To date no qualifying alternative scheme has been approved.