10/07/2025 General | General Pension & Social Security Authority
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Insured Emiratis who wish to receive a lucrative
pension rate and retire early may revert to purchasing inactive service years
in addition to their actual years of employment as per federal pension laws,
stated the General Pension and Social Security Authority (GPSSA).
GPSSA's service 'Purchase of Service Years' differs from one federal law to another. According
to Federal Law No. 7 of 1999 regarding pension and social security and its
amendments, the insured must have spent 20 years employed in an entity, while
in Federal Law No. 57 of 2023, (whose provisions apply to those joining
employers for the first time after the 31st October 2023), the
insured must have served not less than 25 actual service years when submitting
the purchase request, or 15 years if he/she has reached the age of 60.
Insured
males can purchase an additional five service years while females are able to
purchase ten service years under the provisions of Federal Law No. 7 of 1999 on
Pension and Social Security and its amendments. However, the service years that
can be purchased differs for those covered under Federal Law No. 57 of 2023 on
Pension and Social Security, which limits the purchase period to five years for
both genders.
The percentage granted by each purchased service year
varies in accordance with the pension laws applied by the GPSSA. While
purchased years grant an insured male or female an increase of 2% in accordance
with Federal Law No. 7 of 1999, an increase of 2.67% is granted to employees
whose contribution period is from 25 to 30 years.
As for the pension calculation scheme in Federal
Law No. 57 of 2023, the insured receives 4% for each year employed that exceeds
30 years.
Other than the period required for the purchase of
service years, the length of service that can be purchased and the percentage
of increase for each year, there are no other fundamental differences in the purchase
rules between the two federal laws.
In this context, it is important to note that the
period that qualifies an individual to receive the maximum pension amount should
not exceed 35 years.
Purchase
costs are calculated based on the contribution account salary on the date of
submitting the request, multiplied by 20%, which is the percentage of
contributions received by the employer and the insured for the purchased period,
multiplied by the period to be purchased in months.
For
example, under Federal Law No. 7 of 1999, if the insured's contribution account
salary is AED20,000 and he/she wishes to purchase five years, the calculation
for this is AED20,000 x 20% x 60 (months) = AED240,000.
To be eligible to purchase service years, the insured must be employed. If his/her service period ends without paying the full purchase cost, the purchased years are calculated based on the amounts actually paid. If the insured is deceased prior to completing payment, the installments will continue to be collected from his/her heirs.
General Pension & Social Security Authority
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