GPSSA raises awareness on pension and insurance benefits as the topic of the month for April 2025

Abu Dhabi, 11^th April 2024 – As part of its monthly awareness campaigns regarding the federal pension and social security law, the General Pension and Social Security Authority (GPSSA) has chosen to stress on the importance of pension and insurance coverage during the month of April.

Insured Emiratis registered with the GPSSA receive a fixed monthly income in the event of a risk related incident or accident at work, whether this risk is based on a natural occurrence such as retirement and old age or death, or an unnatural occurrence such as a disability, illness, and occupational injury.

Dr. Maysa Rashed Ghadeer, Head of Government Communications Office stressed on GPSSA’s Government Communications Office’s role in providing diverse and pivotal content to members of the media that helps raise awareness on the importance of taking rational decisions when it comes to social security and insurance benefits, ones that help promote a secure and sustainable life for Emiratis, during and after their employment years.

“This year, we launched the ‘Topic of the Month’ initiative, which focuses on a specific insurance topic each month and raises awareness about it through research, study and enriching public interest dialogue via GPSSA’s social media platforms, with information constantly being posted on social security and pension,” said Dr. Ghadeer, adding that last month - the March 2025 topic, was all about ‘Purchase of Service Years.’

During April, three main areas will be emphasized: the benefits of a retirement pension compared to an end-of-service gratuity, contributions and years of service as a long-term

investment choice, and ways to verify that employment years are merged without financial interruption in cases when an insured wishes to obtain a pension, in addition to providing thorough and comprehensive details regarding legal concepts and requirements surrounding pension, how it is calculated and ways to ensure financial and social stability for an Emirati family.

Comparison between a retirement pension and an end-of-service gratuity

The GPSSA noted that there are fundamental differences between a retirement pension and an end-of-service gratuity, the first of which is its definition. A retirement pension is defined as a fixed monthly income paid to an employee for life after the end of his/her service, according to conditions determined by the laws implemented by the GPSSA. An end-of-service gratuity, on the other hand, is defined as a lump sum paid upon the end of an employee's service, whether due to resignation or termination, and is paid for individuals who do not meet pension criteria’s once employed.

The second difference is based on the method of payment disbursements. The retirement pension offers the insured the ability to merge his employment years; the amount continues to be disbursed to the insured or to his/her heirs in case of a decease, given that the eligibility conditions have been met. In some cases, the pension amount is stopped for those entitled to it, but it may be disbursed again if the status of any of the beneficiaries’ change, as per eligibility conditions. The end-of-life gratuity is an amount paid in one lump sum upon end of an employee’s service period, given that he/she has not meet the pension entitlement criteria’s upon completing the number of service years.

Regarding the eligibility conditions, pension is normally paid upon reaching a specified retirement age, provided that the minimum number of service years have been met, unless the individual retires due to inability to work due to health-related reasons, disability or decease. Gratuity, however, is given to employees who have ended their service without fulfilling the pension eligibility conditions.

At the level of financial value, retirement pension is based on the average salary of the employee’s contribution account, years of employment service and the percentage of pension calculation specified in the law, while gratuity is calculated based on an equation in which the pension calculation salary is determined with the calculation mechanism stipulated in the law, which differs in form and content from the method of calculating the retirement pension.

As an additional value, the effects of a pension payment are extended to the insured or pensioners family members after their decease, as if the breadwinner were alive. This is particularly beneficial for unmarried or unemployed daughters. Gratuity on the other hand does not extend to beneficiaries and is paid one time once the individual’s service ends.