Standard Life's Dubai staff to almost double

Standard Life plans to almost double the size of its Dubai office as it seeks to tap into a growing market for savings products and a fertile environment for its flagship corporate pension business.

Standard Life, Scotland's biggest savings and investments company and one of the United Kingdom's top five, will increase the number of staff in its Dubai office from 15 to 25 during the next year.

The biggest corporate pension provider in the UK is also seeking to encourage the Government to help develop the UAE's own corporate pensions industry, said Sandy Begbie, the firm's group chief operating officer.

"We're looking to ways in which we can develop corporate pensions marketplace, and how we can we influence the market here in terms of its ongoing development," he said.

The expansion comes as part of the company's push into emerging markets in which 50 more people will be hired, split between Singapore and Hong Kong.

Standard Life seeks to appeal to expatriates who save a large proportion of their earnings, citing research from Alpen Capital, which shows that residents of the UAE put aside about one third of their disposable income as savings for purposes such as funding their retirement or paying school fees.

However, the firm views the establishment of a government framework for expatriate pensions as one of the biggest opportunities on offer. At present, firms must by law pay end-of-service benefits, also known as gratuities, which top out at two years of basic salary after 25 years of service.

However, financial firms have warned that these costs represent unfunded liabilities and a saver is left with nothing if a company goes bankrupt.

"The opportunity here rests on the sense that a company will provide some sort of provision to an employee currently," Mr Begbie said. "We believe that could be done differently."

Standard Life is "trying to bring some influence to bear" on the UAE's policy development to make corporate pensions more attractive.

The Dubai Department For Economic Development has sought to develop plans for expatriate pension plans.

In the meantime, banks including National Bank of Abu Dhabi have launched their own pension products, which combine employee and employer contribution in a manner similar to a US 401(k) or defined contribution scheme in the UK.

Products that match employee savings would probably be most attractive to the UAE market, but the Government would have to provide support, Mr Begbie said.

"A policy framework is absolutely key. There's no doubt that part of the government's role is to create the policy and environment to encourage employees to save for retirement," he said.

Funding from the Government to encourage individuals to save would be Standard Life's preferred option, Mr Begbie said.

"Having some encouragement for people to save is helpful, in the case of low tax, a government contribution would be the best route."

Standard Life is looking to develop new tie-ups with some of the companies in the region for which it provides pensions in the UK, such as in the oil sector.

It has also explored whether it can collaborate with local banks to distribute pension products.