Frequently Asked Questions

Subscription to the scheme is optional for employers and establishments, and mandatory for employees if the employer registers them in the scheme.

The scheme also allows optional and voluntary subscriptions for the following categories:

• Natural persons for investment purposes, including independent employers and holders of self-employment permits.
• Non-citizen employees working in government entities and institutions, and their affiliated establishments and companies.
• Citizens working in the public and private sectors, with the continued obligation of the establishment or the employer to pay subscriptions for citizens in the pension and social insurance scheme in accordance with the applicable legislation in the country.

The Ghaf Benefits plan is an alternative end-of-service benefit plan by Lunate that allows employers to invest employees’ gratuity into professionally managed funds. It transforms traditional gratuity plans into a powerful tool for financial wellbeing.

The Ghaf Benefits plan caters to a range of investment solutions, including shariah-compliant investment options. At the end of their employment, participating employees receive their entitlement, which could have had the opportunity to grow in value, empowering them to achieve their long-term investment goals. The plan is regulated by the Ministry of Human Resources and Emiratisation (MOHRE), and the funds are licensed and regulated by the UAE’s Securities & Commodities Authority (SCA).

Fees depend on the investment strategy. For detailed information, please refer to the fund’s prospectus.

Lunate Capital LLC is the Fund Manager and Fund Administrator of the Ghaf Benefits plan. The service providers of the Ghaf Benefits plan - leaders in their respective fields - are available in the prospectus.

Lunate Capital LLC is the investment manager of the Ghaf Benefits plan and is a subsidiary of Lunate Holding RSC Limited. Lunate is an Abu Dhabi-based independent global alternative investment manager and is the leading ETF issuer and manager in the MENA region. Lunate has more than 200 employees and $105 billion of assets under management. Lunate Capital LLC is duly licensed and regulated by the UAE Security and Commodities Authority.

The Ghaf Benefits plan offers significant advantages for employers, including reduced administrative burdens by streamlining end-of-service benefit management for HR and finance departments. It also improves talent attraction and retention by enhancing employee compensation packages.

The plan provides the ability to make additional contributions beyond basic entitlements to strengthen employee benefit packages and reinforce employers’ commitment to the financial security of their employees. It also provides access to a robust infrastructure, ensuring professional and cost-effective management of employee contributions by the Ghaf Benefits plan’s SCA-approved investment funds.

By allowing employees to invest their gratuity in the Ghaf Benefits plan, employees benefit from the plan’s robust infrastructure and expertise and can potentially earn returns on their end-of-service gratuity, potentially increasing the amount they receive upon concluding their tenure.

The plan provides a cost-effective and flexible approach to managing contributions, catering to various risk appetites, with conventional and shariah-compliant choices. Moreover, employees can make voluntary contributions and select from different investment options to match their preferences.

Employers’ contribution to the plan for full-time employees is as follows:

• 5.83% of their employees’ monthly basic salary if the employee has not completed five years of service.
• 8.33% of their employees’ monthly basic salary if the employee has served more than five years.
• Subscriptions must be transferred by the employer into the plan within 15 days of the beginning of each calendar month.

Employers are not required to transfer the balance of their existing EoSB liabilities upon subscription for the Ghaf Benefits plan.

Employers have three options:

• Transfer the full liabilities to the Alternative EoSB Scheme.
• Voluntarily transfer a portion of the past liabilities into the Alternative EoSB Scheme as a gesture of goodwill to employees.
• Retain the liabilities until the employees’ end of service.

If employers opt to transfer the existing EoSB liabilities, employees will benefit from compounding on a larger base from the start of the subscription.

Yes, in addition to the basic subscription made by employers, subscribed employees may voluntarily contribute up to 25% of their annual gross salary via monthly or annual contributions.

Employees interested in making voluntary contributions should follow these steps:

1. Decide on your contribution amount, with the option to make contributions either monthly or annually. Please note that voluntary contributions cannot exceed 25% of your annual gross salary.
2. Inform your employer of the monthly or annual amount you want deducted from your salary and invested in the Ghaf Benefits plan. Alternatively, you can directly deposit an amount into your Ghaf Benefits plan account.
3. Select your preferred investment options on the Ghaf Benefits online portal.

The Ghaf Benefits plan offers the following investment options with different risk profiles: 

• Capital Protection: Best suited for conservative investors who prioritise capital preservation.
• Global Conservative: Tailored for investors seeking stability and steady growth.
• Global Balanced: Suitable for investors looking for moderate growth while managing risk. For each investment option, shariah-compliant and conventional funds are available.

If an employee does not select an investment option or does not qualify as a “skilled worker”, they will be automatically enrolled in the Capital Protection investment option (default investment option).

All employees enrolled in the Ghaf Benefits plan must be invested in at least one of the offered investment options. The employee can allocate 100% of the gratuity to one investment option or divide it among different investment options.

For more information about the available investment options, please refer to the Ghaf Benefits fund’s prospectus.

A skilled worker is defined as an employee who earns a monthly gross salary of AED 4,000 or more and meets the minimum academic and professional requirements, according to the officially recognised labour classification system in the UAE.

The investment returns will depend on the selected investment option and market conditions. It is important to understand that higher potential returns often come with higher volatility, so employees should choose an investment option that aligns with their financial goals and their risk preference.

If an employee does not select an option, they will be automatically enrolled in the Capital Protection investment option.

Back-tested performance of the Ghaf Benefits plan funds is available upon request. However, it is important to highlight that past performance does not guarantee future results.

No dividends or distributions will be paid during the lifespan of the plan. Instead, the reinvestment of returns will work to enhance your overall performance, driving greater potential for growth.

Redemption of funds contributed by the employer is permitted only upon termination of employment, with the entitlement processed and paid out within 14 calendar days from the eligibility date, as per applicable laws and regulations.

Voluntary contributions made by the employee can be redeemed at any time directly through the Ghaf Benefits plan portal.

There are no penalties for withdrawals, although they are only permitted in the circumstances explained above.

No, upon end of service, employees have the option to retain their investments in the Ghaf Benefits funds or cash out the full amount.

If an employee changes jobs and their new employer is also registered in the scheme, their accumulated benefits transfer seamlessly to their new account within the scheme.

This ensures:

• No interruption to the investment and growth of their accrued funds.
• Full continuity of benefits without the need for liquidation or withdrawal.

The minimum service period required for an employee to qualify for a payout is one year.

• If employment ends within the first year of joining, the employer may recover the basic contributions already paid.
• After completing one year, employees are entitled to the full balance of basic contributions and the associated investment returns, payable within 14 days of the eligibility date as per applicable laws and regulations.
• Voluntary contributions are always accessible to employees and are not subject to the one-year rule.

Ghaf Benefits is regulated by the UAE Securities & Commodities Authority (SCA), with a requirement to meet stringent financial and operational standards.

In the unlikely event of an insolvency, the SCA, in collaboration with the Ministry of Human Resources and Emiratisation (MOHRE), would oversee the protection of employees’ funds, potentially facilitating the transfer of assets to another approved fund manager.

The scheme is regulated by the Ministry of Human Resources and Emiratisation (MOHRE), and the funds are licensed and regulated by the UAE Securities & Commodities Authority (SCA). Ghaf Benefits is legally responsible for acting in employees’ best interest, including that investment allocations align with the employee’s selection, and that employees have transparent access to fund performance.

The Ghaf Benefits plan is expected to qualify as a Private Social Security Fund and be exempt from UAE corporate tax.

The scheme is considering different options for providing certain tax reporting to employee participants to meet certain tax reporting obligations specific to their country of residence or citizenship. Neither Lunate nor the scheme is required to provide or assist with such reporting. UAE-specific tax reporting is not required under the UAE Corporate Tax Law, and no UAE-specific tax reporting is generally anticipated for employee participants who are solely tax residents in the UAE.

To the extent employee participants require tax reporting to meet tax reporting obligations specific to their country of residence or citizenship, the employer can contact the scheme to discuss what additional tax reporting needs they anticipate. Neither Lunate nor the scheme provides tax advice, and any discussion of tax-related matters is for general informational purposes only and may not be relied upon. Lunate is exploring options to facilitate certain limited tax reporting for U.S. persons to assist with meeting certain U.S. federal income tax reporting obligations, which may be at cost to participants. Participants in the scheme should consider their individual tax obligations in consultation with a qualified tax adviser.