One year after its launch, the DIFC Employee Workplace Savings (DEWS) Plan has garnered over $127 million in assets under management as of 1st February 2021, encouraging and facilitating a new approach to savings via the workplace.
Launched in February 2020 for the employees of Dubai International Financial Centre (DIFC), and proving to be the first of its kind within the region, the DEWS Plan introduced a progressive, end-of-service benefits strategy, as part of a restructuring of the previously defined benefit employee plan, into a funded and professionally managed defined contribution plan. DEWS also offers a voluntary savings plan, allowing employees working in DIFC to help boost their savings.
Chris Cain, Client Services Director (Middle East), Equiom said “DEWS aims to address a key issue with the (EoS) benefits system in the Middle East where employers are not obliged to fund their EoS liability externally. Most companies therefore tend to make EoS payments from company cashflow, meaning that employees are not protected against employer insolvency. DEWS has addressed this issue and as part of the scheme, once funds are paid on behalf of employees, the sum is ring-fenced and is no longer a liability of the employer, making it safer for employees.”
Within the first year alone, 19,182 members of the DIFC workforce from 1,187 of DIFC’s firms enrolled in the DEWS Plan. A substantial number of employees have also chosen to make additional voluntary contributions from their salaries into the DEWS Plan, showcasing trust in this medium to long-term savings plan which allows employees to plan for lifetime events; such as their retirement.
Arif Amiri, CEO of DIFC Authority added: “So far we’re delighted with the high levels of uptake by our clients and workforce. The introduction of DEWS is one of many ways DIFC has contributed to the Dubai Plan 2021, by making the emirate a pivotal a hub in the global economy; as well as making it a preferred place to live and work. Whilst providing participants with more transparency and security over their financial future, DEWS helps the Centre retain its status as a world-leading international business hub that attracts the best talent who help us drive the future of finance.”
The success of the DEWS Plan is a testament to DIFC’s position as the leading global financial centre in the region, and exemplifies the Centre’s sustained focus on enabling firms to attract and retain world-class talent in line with UAE’s National Agenda and Dubai Plan 2021. The DEWS plan is established as a Master Trust governed by Equiom (Isle of Man), while Zurich Workplace Solutions acts as the Plan administrator and Mercer as the Investment advisor.
Claudia Maldonado, Principal at Mercer leading their defined contribution savings solutions, said: “We are aiming to foster a culture of savings through the DEWS Plan, which supports employee engagement while offering flexible options to meet the requirements of individual employees and their savings goals. It also provides employers with a compelling proposition when attracting and retaining the best talent as the DEWS Plan provides employees with security of benefits, as well as an efficient best-in-class platform to further build on and grow their benefits and savings.”
Members of the DEWS Plan are able to decide on the investment option that best fulfils their personal requirements, with 5 different risk-graded options, including a Sharia-compliant option. As of late January 2021, the majority of the DEWS Plan’s assets (75%) remain invested in the Low/Moderate Growth Fund, which is the default fund of the DEWS Plan. Nearly 20% of the assets are split across the other growth fund options including the Moderate Growth, Moderate/High Growth, and High Growth funds, which highlights individual employees’ engagement and the active role they are taking in their savings and financial planning.
Reena Vivek, Senior Executive Officer at Zurich Workplace Solutions, added: “Tailored to meet the unique requirements of this region, the DEWS scheme has successfully turned an unfunded liability into a recognisable and secure benefit. The success of the initiative can be attributed largely to the simplicity of the plan and digital enablement, ultimately reducing the administrative burden on employers and empowering members to secure their financial future. The growing number of employees making voluntary contributions into the plan is a clear sign of the positive impact DEWS has had in encouraging regular savings.”