A new study by Smart focuses on public attitudes towards retirement savings in Qatar, Saudi Arabia and the United Arab Emirates.
A survey of 1,500 individuals in Qatar, Saudi Arabia, and the UAE has revealed that most respondents considered benefits as a key factor before relocating to Qatar or other Gulf countries.
The survey, conducted by the pensions technology platform Smart, aimed to highlight the attitudes of Gulf expats towards end-of-service gratuity and retirement planning.
End-of-service gratuity is a legal benefit that ensures financial compensation for the time an employee has worked for their employer in Qatar.
This system is set for expat workers in Qatar, as well as other Gulf nations, and serves as an alternative to pensions. The retirement age for nationals in Qatar’s public sector jobs is 60. There is no retirement age limit for the private sector.
Law 14, Article 54 or Qatar’s labour law states a foreign national employee is eligible for gratuity if he has worked for at least one year of continuous service with the same employer.
The minimum gratuity payable is 21 days basic salary per each year, and the last basic salary is the base for calculating gratuity.
Key findings
Qatar, alongside other Gulf nations, proved to be an attractive work destination for 84% of survey participants due to the benefits offered by their employer.
More than half of the people surveyed, or 63%, said they had a good understanding of the retirement savings system before moving to the Middle East, showing that it is something they took an interest in.
At least 60% of participants believe the current end-of-service gratuity system “only partly or doesn’t at all meet their retirement savings needs”.
A majority of participants say they are somewhat prioritising or highly prioritising saving for retirement, with 92% agreeing that either the government or their employer should be involved in implementation and regulation of employees’ retirement savings.
Polls also saw 66% surveyors suggesting improvements to the existing end-of-service gratuity systems.
Some key suggestions from Qatar includes introducing “an option for employees to access a portion of their end-of-service gratuity before leaving their job, especially in cases of financial hardship or for specific life events”.
“I think it is crucial to have a transparent system that clearly explains how gratuity is calculated based on years of service and salary,” said another surveyor from Qatar.
Another expat in Qatar suggested that “government should make it compulsory for both employer and employee to contribute toward retirement funds”.
Expatriates are not eligible to receive pensions from the Qatari government. As such, financial planning is entirely an expat’s responsibility.
Qatar’s Ministry of Labour’s official website provides an online service that allows applicants to calculate the end-of-service gratuity. The page is only available in Arabic.
