Happy New Year! We hope all our readers enjoyed the holiday season. As we kick off 2025, we at Pensions Monitor have taken a moment to gaze into our crystal ball and see what lies ahead for the End of Service Benefits (EOSB) Savings market.
Here are our top five predictions for the year:
Prediction 1: First live clients
A fairly safe prediction: With several players having officially announced their market entry (Daman Investments, Lunate, FAB, National Bonds), the first live clients are expected to sign up to the new EOSB scheme.
It will be very interesting to see what kind of clients will sign up though. First and foremost, we expect that some related companies will be “encouraged” to test the waters. Will other companies sign up too? We will see.
How will employees react? Will they be happy with the investment choices on offer? Will the sign-up process be smooth? How will customer service work – call centres, mobile apps for employees, support hotline for HR officers? We at Pensions Monitor will keep our ear on the ground and share with you this year the feedback from the first clients.
Prediction 2: A trickle, not a flood
Our second prediction is regarding the number of companies and employees that sign up for any of the new EOSB Saving plans: We believe the volumes this year will be very modest indeed. It will be a trickle, not a flood.
We predict this for two reasons:
The providers want to make sure first that their processes are robust, before opening the flood gates. And in some instances, providers first need to make sure that their offering is complete (with additional investment funds), and the IT systems are bug-free and working. That takes time.
Some providers cannot open the flood gates as they do not have an extensive corporate client base to market the new scheme. FAB and National Bonds obviously have a large client base and strong distribution capabilities, however, the cross-sell possibilities of Lunate and Daman Investments may be somewhat limited.
Prediction 3: Regulatory amendments
In an earlier article we mused about the potential timeline for compulsory introduction of the new EOSB scheme, fully replacing the current EOSB Gratuity mechanism. In that article, we concluded that, January 2026 is potentially the earliest the regulators could announce that the scheme will become compulsory from January 2027 onwards, providing a 12-month window for companies to get ready.
January 2026 is not far away - the countdown has effectively started. It may well be that – say – in summer of this year the Ministers will ask their staff: How many providers are live? How many clients have signed up? Are employees satisfied with the new scheme? How many investment funds have been launched?
One can imagine that in such meetings the participants will shift uneasily in their chairs, as the answer to those questions will likely be “only a few”, and “employees not highly satisfied”. One can further imagine that the Ministers will want to know why this is the case in no uncertain terms.
Or perhaps some of the very large employers in the UAE with more than 100k employees across their groups, will look at the market offering, and the fine print of Cabinet Resolution 96, and have a quiet word with some officials explaining why the available EOSB savings plans don’t quite work for them.
As a result, we expect some regulatory changes, easing some restrictions and making the system overall more attractive and more robust. For example:
Allowing (at least on a temporary basis) foreign and DIFC/ADGM-based fund managers to offer a range of attractive low-cost equity funds.
Allowing providers to offer funds from multiple approved fund managers (“best of breed” approach).
Allowing funds with some additional charges, that are to be used for marketing, distribution and education.
Allowing the accumulated legacy EOSB to increase with salary increases, to make the new scheme more attractive for employees.
Prediction 4: More providers
The new year will definitely see more providers entering the market. We expect Emirates NBD, Abu Dhabi Commercial Bank (ADCB), HAYAH Insurance and potentially SUKOON to enter the market as well in due course.
It is also possible that some international players will enter the market (see next prediction).
Prediction 5: International players becoming more active
So far it has been striking to see that by and large only local providers have entered the market. What about the big international players, e.g. Fidelity, Vanguard, Franklin Templeton, Schroder, Blackrock, Amundi, Invesco, MetLife, Zurich, Nomura, Allianz Global Investors/PIMCO, etc.?
Most of these have chosen the route of “feeder funds” which are not allowed as investment vehicles for EOSB Savings scheme. Perhaps some of the international players manage to convince their head offices to relocate a full investment team to the UAE, or perhaps the regulators will grant a (temporary) exception to the rule. In any case, we expect that some of the international giants will wake up and join the fray.
Conclusion
Whether any of the above will come true – only time will tell. (We will revisit and review our predictions in a year’s time).
At Pensions Monitor, we're closely monitoring the progress of the new EOSB Savings market in the UAE and will keep you informed with any important updates. If you haven’t already, be sure to sign up for our newsletter to stay up-to-date on the latest developments and discussions within the UAE's pension industry.
We wish all our readers a very happy and successful New Year!
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