New NBAD expat pension scheme: demystified

New NBAD expat pension scheme: demystified
06 February 2013

YESTERDAY the National Bank of Abu Dhabi announced a new scheme under its subsidiary, NBAD Trust Company (Jersey) Limited, a new pensions and savings scheme called the ‘Wealth Builder Plan’. The scheme is billed as ‘the first pension scheme for expatriates by a UAE bank’ designed for ‘domestic and multi-national companies that employ expatriates’. Interest piqued? We’ve got the relevant information you need to know about this scheme below…

What is the ‘Wealth Builder Plan’? Wealth Builder Plan is a new service offered by National Bank of Abu Dhabi’s (NBAD) wholly owned subsidiary; NBAD Trust Company (Jersey) Limited.  Wealth Builder Plan (WBP), the ‘first pension scheme for expats by a UAE bank’, has been specifically designed for domestic and multi-national companies that employ expats and seek to increase their return on human resources investment by attracting, rewarding and retaining talent.  It’s basically a packaged corporate structure underpinned by a range of investment fund options that employees can choose based on how much they’re willing to risk.  The schemes are tailored to the individual, and regular investments can be made solely by the company or by both employer and employee.

Why should I be interested? If you’re employed by a company using the scheme, WBP is a savings plan that gives you the chance to have future savings in a secure trust outside of your workplace. Having an account under a trust structure means your assets are safer.
You have the option of paying money into a separate account which you would entirely own. You would have access to investment options when enrolled in the scheme, which would otherwise not be offered to individual investors. The investment options are categorized into 3 different categories based on the risks entailed. WBP also offers employees a matching contribution option (depending on whether your company chooses to include this option in the plan).

Why NBAD? Currently, NBAD is the only UAE-based bank to have a scheme like this one approved – they were licensed in March 2012 to operate the plan. Since 2009 NBAD has been ranked one of the 50 safest banks in the Middle East by Global Finance, so they have a solid reputation.

What am I investing in? As a part of the plan, an asset management solution provides employees access to world-class investments managed by NBAD’s Asset Management Group. The benefits of investing in a mutual fund are diversification, specialization, cost effectiveness, liquidity and regulation.

The funds in the scheme are categorized into 3 main areas: conservative, balanced and growth investment approach, which depict the level of risk associated with the funds. A conservative fund offers benefits such as capital guaranteed investments. It is a low risk investment profile that is more biased towards bonds. The conservative fund is suitable for investors who are near to retirement or aren’t looking for anything too risky. NBAD’s balanced fund has a more moderate risk profile with an equal bond to equity split. A balanced fund is suitable to investors who have a medium term investment and are willing to take more risk in order to capture market upside.

A growth allocation fund offers a high risk profile that is more biased towards equities. A growth allocation fund is a more suitable approach for investors who are perhaps younger and/or can potentially tolerate a higher degree of uncertainty in order to secure long term returns.

In addition to all of the above there are options for Sharia’a compliant investments.

What happens if I leave the UAE or my employer? When you are enrolled in the scheme, the account will be held under your name. This ensures that the account belongs to you and not the organization you work for. Therefore, you can still remain a member of the scheme after you leave an organization or even leave the UAE, if you want to.

What is a trust and why a trust? A trust is a service that is designed and structured to preserve and protect what is yours. It gives you greater control over your assets not only in your lifetime but for those who you leave behind. A trust is a means of providing for you and your family and protecting your assets in a way that is tailored to suit your future plans. Assets held under a trust structure cannot be accessed from any organization or entity - for example assets held in a trust cannot be frozen or accessed by any other bank or company.

What do I have to be earning and how much will I have to contribute? There’s no salary bracket or financial pre-requisites for being offered the scheme. Each scheme is tailored to what your employer specifies, so contributions are down to the discretion of yourself and your employer. The most attractive option for you as an employee would probably be to choose a matched contributions plan, where your employer matches what you invest each month up to a capped amount, if the company you work for chooses to incorporate this into its WBP.

How long would I have to contribute to really benefit from the WBP? When will I be able to enjoy the benefits of the scheme? Whilst it is listed as a ‘pensions and savings scheme’, this is essentially a pension scheme. The younger in your career you are when you sign up to the plan, the bigger the reward you will reap at the end. There is no minimum age to start the scheme, and benefits would become available at yours or your employer’s discretion.

Would the investment be tied to the fluctuation of the dirham? In this plan, you have the choice to invest in whatever major currency you would like, as long as the investment options you want to choose are available for that currency.

Will this affect my End of Service Benefits? Wealth Builder Plan is solely an investment scheme, so your End of Service Benefits remain unaffected. This plan runs alongside them.

WILL YOU be taking part in the Wealth Builder Plan if your employer introduces the scheme? Comment to cashy below!


  • Colin

    This is a very important development, I hope many companies see the value to their employees, especially as more and more of us are concerned about our futures. A new study by Towers Watson, The Global Workforce Study (GWS), a survey of 32,000 employees worldwide including over 1,000 in the UAE, found that over half (53%) of UAE workers claim that retirement security has become a higher priority for them over the past three years, rising to over two-thirds (67%) for workers aged over 40. The pdf of the study is here

  • ConsumerWatch

    Globaleye’s MD Scott Balsdon was recently invited to be a guest on Dubai Eye radio to discuss the new National Bank of Abu Dhabi’s pensions and savings plan for expats. He also discusses what is available on the market in terms of pensions, how popular they are and how they work. Listen to a recording of the show here...

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