Skip to main content
Article

End of Service Benefits in the Middle East

2020 survey results

Health and Benefits|Retirement
N/A

By Michael Brough , Leonie Spackman and Ashika Tailor | June 10, 2021

The majority of respondents confirm that they provide ESBs, not only because of contractual requirements but also to maintain consistency between countries and for the retention of key talent.

Unlock More

About the survey

Willis Towers Watson has produced the Middle East End of Service Benefits (ESB) Survey annually since 2010. Our 11th annual survey is produced in partnership with Equiom and surveys a broad cross-section of organisations with operations in the Middle East to look at the level of provision, the structure and delivery of employee ESB. This year, responses were received from over 330 organisations across the region, an increase of 6% over 2019.

We received responses from various organisations with operations in one or more of the 6 Gulf Cooperation Council (GCC) countries and elsewhere across the wider Middle East region. The majority of the respondents are multinationals or global organisations.

In our 11th annual Middle East End of Service Benefits (ESBs) Survey we received responses from over 330 organisations across the region, an increase of 6% over last year. The objective of the survey is to determine how organisations in the region:


  • Fund their statutory and enhanced ESB liabilities
  • Structure their enhanced ESBs (i.e. who are they offered to and under what conditions)
  • Use savings vehicles such as long-term savings or retirement plans to provide benefits over and above statutory ESB requirements

Key findings

The majority of respondents confirm that they provide ESBs, which is no surprise given they are mandatory in many countries in the region. Additionally, two in five indicate that they provide an enhancement to the minimum benefits for employees in the countries in which they operate.

The most common reason given for providing an enhancement is contractual requirement (41%), followed by consistency between countries (39%), and retention of key talent (33%).

Out of the organisations that provide ESBs, none of them made any recent changes to their end of service benefits as a result of COVID-19 during 20201.

The majority of organisations (62%) that enhance their ESB offer these enhancements to all employees.

The majority of organisations (62%) that enhance their ESB offer these enhancements to all employees. A significant minority only offer them to specific categories of employees only: top management and local non-nationals. Interestingly, fewer organisations appear to be distinguishing between local employees and international assignees when offering enhanced benefits, a practice that we notice has been steadily declining since 2016. This suggests that the provision of these benefits is becoming more commonplace locally.

Organisations that provide enhanced ESBs through the defined benefit (DB) formulae most commonly use an employee’s length of service as the principal factor in determining the enhancement.

Offering a separate define contribution (DC) pension or long-term savings plan remains the most popular way of enhancing ESBs. Enhanced DB accrual rates are the second most popular method.

Structure of enhanced ESBs

Almost three-quarters (72%) of the organisations providing enhanced ESBs indicate that length of service is important, whilst other factors include key talent, job grade and intra-company transfers.

In the past, the most prevalent enhancement to the benefit was the application of continuous service to the mandatory ESB formula. The most common method of (effectively) enhancing the ESB is providing a supplemental DC plan. Out of the 120 organisations that enhance the ESB in some way, 46% responded that they offer a supplemental DC plan to employees.

Nearly a quarter (24%) of respondents indicate that they offer a retirement or long-term savings plan to their employees.

Retirement and savings plans

Nearly a quarter (24%) of respondents2 indicate that they offer a retirement or long-term savings plan to their employees. Of the organisations offering a supplemental plan, 50% offer membership to all employees. The remaining offer membership of such plans to specific categories of employee, including local nationals, top management, international assignees and local non-nationals.

Similar to the 2019 survey, long-term savings or retirement plans were most frequently offered in Egypt and the UAE as in prior years. The country with the next highest prevalence is Turkey, consistent with last year3.

Footnotes

1 Based on 46 survey responses which indicated providing end of service benefits and responded if they have made any changes to their end of service benefits as a result of COVID-19 during 2020.

2 Based on 316 survey responses to this question

3 Based on the organisations that indicated they offered a retirement or long term savings plan

Download
Authors

Senior Director, Global Services Solutions

Associate Director, Global Services and Solutions

Associate Director, Global Services Solutions

Related content tags, list of links Article Health and Benefits Retirement

Related Solutions

Contact Us