Lunate Introduces UAE's First Voluntary End-of-Service Savings Scheme

Lunate Capital LLC has become the first Abu Dhabi-based fund manager to receive initial authorization from the Ministry of Human Resources and Emiratisation and the Securities & Commodities Authority to offer the UAE's Voluntary Alternative End-of-Service Benefits Scheme. This development marks a significant shift in how end-of-service benefits are managed in the UAE, providing employees with enhanced control over their financial futures.

The Voluntary EoSB Scheme, approved by a UAE Cabinet Resolution in 2023, offers private sector employers an alternative to the traditional lump-sum end-of-service gratuity payments. Instead, employers can now invest employees' end-of-service gratuities as monthly contributions into licensed investment funds accredited by MoHRE and SCA. This approach aims to provide employees with the opportunity to grow their end-of-service benefits through professionally managed investment funds, thereby enhancing their financial security.

Lunate plans to offer a selection of six investment funds under the EoSB Scheme, including both conventional and Shariah-compliant investment strategies. This variety allows employers and employees to allocate capital across different strategies, with employees having the option to customize their investment approach based on individual risk preferences. Additionally, employers can make extra contributions, and employees can voluntarily contribute an incremental percentage of their salary to the EoSB Fund.