Dr Abdullah Al Shamsi is passionate about pensions



ABU DHABI // One question that has continued to linger in Federal National Council sessions is that of pensions.

Dr Abdullah Al Shamsi, one of the oldest members on the council, has been an advocate for pensioners since he was elected in 2011.

He has made repeated calls to increase pensions for those who retired before 2008 and are paid less than those who retired after. He also wants to link pension payments to inflation.

His firm and loud voice has echoed in the FNC chambers as he expressed the frustrations of his fellow retirees, and their inability to cope with current living standards and inflation.

His questions, mostly directed at Obaid Al Tayer, Minister of State for Finance Affairs and deputy head of the General Authority for Pensions and Social Insurance, have resulted in clashes between the men.

These have been particularly fuelled by Mr Al Tayer’s refusal to answer questions when the authority board members were being reshuffled and then by his delay in appearing before the council soon after.

Even after Mr Al Tayer said the authority would work to tie pensions to inflation, Dr Al Shamsi said it was not enough. He said a solution was needed for workers who retired before 2008 and were receiving lower pensions.

Mr Al Tayer told the council the authority had nothing to do with existing payments because they were mandated by law.

“The increase does not come from the authority, it comes from the Government,” he said. “The authority has nothing to do with increases because these increases must come with a set budget. The question has nothing to do with the authority.”

A frustrated Dr Al Shamsi said Mr Al Tayer’s answers gave the impression that they were living in “different worlds”.

“We summoned the minister because he is a main member [in the pension authority],” he said. “The agony these retirees are in is huge. I have a lot of things I would like to say, but since he said he has nothing to do with it – and other things that I don’t like – then ... ”

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Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

Sukuk

An Islamic bond structured in a way to generate returns without violating Sharia strictures on prohibition of interest.

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