The Ministry of Human Resources and Emiratisation (MoHRE) has updated the enrollment process for the EOSB Savings scheme, now requiring companies to directly approach approved fund managers instead of MoHRE. This change, communicated through MoHRE's call center, modifies the previous requirements outlined in Article 4 of Cabinet Resolution 96.
This change in process is expected to facilitate better education on the scheme for companies and will also enable fund managers to complete Know Your Customer (KYC) procedures before MoHRE’s final approval. Furthermore, the approval from MoHRE will now be obtained directly by the fund manager on behalf of companies that wish to enroll into the scheme.
Pensions Monitor has consulted with fund managers and below is an overview of the key steps for enrollment in the scheme as of October 2024.
EOSB Savings Scheme Enrolment Process
Initiation: Companies must contact an approved fund manager to begin the enrollment process. This will be followed by meetings to discuss product offerings.
Confirmation: A board resolution will be required to confirm the decision of the Company to enroll in the scheme.
EOSB Employer Agreement: The fund manager will then provide an agreement that must be signed by the authorized representatives of the Company.
Supporting documents: Along with the EOSB Employer Agreement, the Company will also be required to submit several other documents similar to those typically required to open a Company bank account. The specific list of documents will depend on the Company’s legal structure, but typically includes the following:
Constitutional documents such as the Trade License, Incorporation Certificate, Articles and
Memorandum of Association and amendments thereof, etc.;
Personal documents of all shareholders with more than 5% shareholding in the Company such as Passport, Emirates ID, etc.;
Authorized signatories and supporting legal documents that delegate such authority;
Personal documents of authorized signatories such as Passport, Emirates ID, etc.;
Audited financial statements and bank statements of the Company;
Tax Registration Certificate and Corporate Tax Registration Certificate;
Declaration forms – FATCA, CRN and TRN;
Address proof of the Company such as Ejari, utility bills, etc.;
Employee information: This EOSB Employer Agreement will also include details on employee demographics - names of employees to be enrolled, skills-level and fund choices, employment type, length of service, salary details, contribution per month, and other particulars. This information will subsequently be uploaded in the EOSB administration system of the fund manager.
KYC assessment: An internal KYC assessment will then be conducted by the fund manager based on the submitted documents. It is important to note that the scope of these assessments may vary by fund manager, and in some cases may also include an evaluation of employees for which personal documents of employees will be required.
In any case, if the overall evaluation results in an initial approval, the fund manager will forward the application to MoHRE for final approval. Otherwise, the fund manager retains the right to reject the Company's application based on the KYC findings. If this occurs, the Company must address the observations, failing which will result in termination of the enrollment process by the fund manager. In this situation, the Company may choose to initiate the enrollment process with another fund manager, although the KYC assessment by the other fund manager will likely yield similar findings.
Confirmation and agreement: After receiving final approval from MoHRE, the Company will be issued a confirmation of registration along with the final EOSB Employer Agreement, which will be countersigned by the fund manager.
Company EOSB account: The next step will involve the opening of the EOSB account for the Company with the custodian bank that will be arranged by the fund manager.
EOSB administration system: Employee data will then be loaded into the EOSB administration system. The specifics will depend on the EOSB administration system chosen by the fund manager. Some, as we have heard, will fetch data about employees directly from MoHRE while others will require a manual upload (more on this will be discussed in an upcoming article). Once completed, access will be granted to the Company and its employees through the EOSB administration portal and mobile application, respectively.
Considerations for companies
This streamlined process clearly aims to enhance efficiency and ensure that companies receive comprehensive guidance as they navigate the new EOSB savings scheme. Nevertheless, the sign-up process is bound to be labour-intensive due to the various compliance requirements. The quality of service will very much depend on how well the fund manager manages the administrative aspects of the process. By way of comparison, we all know some banks that offer fiendishly complex processes to open let's say, a corporate bank account, while others are digital, seamless and quick.
Therefore, we at Pensions Monitor advise companies to thoroughly evaluate the offerings of multiple fund managers before enrolling – including their administrative capability and service quality. Although the enrollment process may seem straightforward, changing fund managers later due to poor fund performance, customer service, or system issues will be cumbersome.
Furthermore, switching fund managers involves transferring sensitive employee records from one fund manager to another which is partly why approval to change fund managers may not be easily granted. We will discuss the specific conditions for changing fund managers in a separate article.
Additionally, since EOSB funds are still ‘new’ as of October 2024 (more on this in our next article), it is wise for companies to track fund performance across different fund managers over time. This will help identify which funds best meet the needs of both the company and its employees.
And finally, companies should also carefully review the terms and conditions set forth in the EOSB Employer Agreements, paying close attention to investment options, fees, and capital guarantee mechanisms to ensure these align with their requirements.
Pensions Monitor will set to launch a fund performance comparison tool for companies. Subscribe to our newsletter for direct notifications and general updates on the End-of-Service Benefits Savings market.
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