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Dubai: Al Hathboor Group has implemented a staff pension scheme for 600 managers at the company.
The scheme, which augments the state end-of-term gratuity system, means that qualifying Al Hathboor staff will receive a payment at the end of their service that has been properly funded and managed.
HSBC is acting as adviser, trustee, custodian, administrator, record keeper and fund manager of the scheme. "Currently, employers are not funding their staff's end-of-service gratuities, and are instead paying their liabilities as they arise from working capital," said M. Salahuddin, CEO of Al Hathboor Group.
Standards
"By setting up a properly administered and managed fund, Al Hathboor is adopting world-class standards of corporate governance, and is accounting correctly for its staff pension liabilities," he added.
In addition to enhancing its governance standards, Al Hathboor also sees the move as a valuable tool in attracting and retaining skilled staff.
"Employee pension schemes in the GCC are virtually non-existent," said Simon Stirzaker, Manager Employee Benefits at HSBC. "Staff have to rely on the end-of-service gratuity for their pension, which usually is an unfunded liability for their employer," he added.
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