The Daman GEB Trust is both a Gratuity Benefit Scheme in line with the local End of Service Benefits obligations in the UAE, and an Employee Savings Plan that can accommodate contributions from you & your employees via salary sacrifice.
Once invested within the plan, there is a clear segregation of assets regarding each separate pot – be it Employer Gratuity, or Employee Savings Plan.
Each pot can then be invested in several different options, from self-selected funds to risk-based portfolios, or simply left in cash if desired. With the levels of flexibility offered, you and your employees can decide exactly how you wish to invest your respective balances.
We also offer flexible payment methods in terms of funding your liability, with the ability to increase or reduce this at any time, at no additional cost.
Your Employees can fund their savings plan via salary sacrifice at their leisure, and stop or restart this at any time with no additional costs in doing so.
The plan provides your employees peace of mind with regards to their gratuity rights, by transferring the assets within a Trust-based Scheme established purely for the purpose of managing gratuity (and Employee Savings balances).
We also offer flexible payment methods in terms of funding your liability, with the ability to increase or reduce this at any time, at no additional cost.
If you’d like to get more information, contact our team here on ([email protected]/+971 24184433), and we will be more than happy to assist in any way we can.
Praxis is an independent, leading provider of bespoke private wealth and corporate administration services to companies, individuals and families across the world.
Established locally within the UAE in 2016, regulated by Abu Dhabi Global Market, and with offices in both Dubai and Abu Dhabi.
For Praxis, their clients’ interests are at the forefront of everything they do. They are focused on delivering excellence in client service at every opportunity. A consistent quality of thinking that has shaped their reputation for innovation and proven delivery for over 50 years.
If you are an existing Daman client and looking to join the Daman GEB Trust please contact your existing Daman Sales Manager.
The process is simple and straightforward. The team will provide you with our application form and ask a few questions to get an idea of your liability obligations. This will allow us to provide you an initial calculation on your gratuity liability.
To proceed, just complete the application form and return to our administrators alongside the supporting due diligence and company documentation outlined within this, and we can get this set up for you – simple!
To set up the Plan, there is an initial fee of $12,000.
The annual starting charge of the Plan is 1% of the total assets under administration, which reduces on a sliding scale determined by the value of the Assets, to a rate of just 0.45%.
Employees who decide to contribute via Salary Sacrifice will also be charged a flat-rate fee of $20.00 per annum, paid $5.00 quarterly.
This is not inclusive of any underlying investment fees and charges and all fees are subject to VAT.
You can pause contributions at any time that suits you – there are no charges for pausing or restarting contributions.
Once your company has set up the plan with us, it’s a simple matter of then providing a list of your Employees Emirates ID numbers, their start date, current salary and should they wish to contribute via the Salary Sacrifice method, their rate of contribution.
When the employees have been accepted as members of the plan and funds have then been transferred,your eligible employees will then receive their log-in details to the portal.
They will need to go through their account-opening process. Once done, they will then have access to the portal.
There is no need for employees to contribute to the Plan. If they decide to, this is funded via salary sacrifice from the employment payroll.
The Scheme cannot accept direct contributions from employees.
Employers can also contribute to the savings plan for the employees – either for all or select persons/groups of employees.
The Gratuity Benefits are calculated using the Federal Laws as applicable within the UAE for Gratuity provision, specifically Labour Law No. 8 of 1980, as updated under Article No. 33 of 2021.
This is calculated as follows:
This is capped at 2 years of salary, equating to approximately 18 years of service.
The Daman GEB Trust calculates the gratuity liability on a daily basis. Although gratuity is not payable within the first year of service, the calculation method smooths the funding curve by accruing for all employees from their first day of service.
The payable liability is based on the employee’s basic salary only (excluding benefits, which are not considered) at the time of leaving.
If you want to know your approximate Gratuity Liability, we can look in to providing you with a simple illustration to aid you.
We will ask a few simple questions such as employee start dates and their monthly wage. This will allow us to create a calculation to help give you an idea of your current liability.
Upon joining the Scheme, we will provide a more in-depth illustration and analysis of the current and increasing liability.
There is an annual minimum funding of 1 million AED.
The Plan has been established for funding and administering an employer’s Gratuity liability in line with the UAE Labour Law. Withdrawals from the Plan are only permitted on the basis of making gratuity payments to departing employees.
Employees utilising the employee savings element of the Scheme can withdraw their Employee Savings element at their request.
There are many options, ranging from cash to term deposits, or using actively managed risk-rated portfolio funds, to self-selecting an investment portfolio from a diverse range of investment funds with fees as low as 0.2% per annum.
Employers can select the investment they prefer for their funded Gratuity Liability. Employees will have no control over what the Employer Gratuity Liability is invested in, and likewise the Employers will have no influence over the Employee Savings elements.
Both Daman and Praxis are not licensed or regulated to provide any investment advice. Any investment options selected are done so entirely by the participating Employer & Employee.
If your Employee has left service, they have a few options, depending on whether they are using the Employee Savings element of the plan or not.
If they are NOT using the Employee Savings element, you will need to notify us of the Employee’s end of service date, so we can return the respective Gratuity Liability to you for onward distribution to the Employee.
If a company has not fully funded their liability, they can use their corporate cash flow rather than withdraw from the Plan. This will permit you to quickly pay your obligations whilst permitting your Plan to continue to grow to meet its total liability.
If the departing employee has contributed to the Employee Savings element, the options are as follows:
The employee is under no obligation to leave the plan, they can remain invested and withdraw from the plan as and when they want. However, they will not be permitted to make any further contributions.
Please contact us on [email protected] with the following information so we can outline the next steps:
Our administrators will then assist you. Note that we will issue gratuity liabilities back to the employer to distribute to the employee’s beneficiaries.
As the Plan is established under trust, should the trustee Company go into administration, your assets are protected, and the Trust will be transferred to another Trustee for ongoing management.
Given the legal protections and segregation applied by the Trust, the assets are fully ring-fenced and are unable to be used for any purpose aside from the provision of the gratuity & employee benefits.
Praxis, Daman nor creditors have the ability to use Plan Assets in the event of the Trustees going into administration.
Praxis are the licensed and regulated Trustee of the Plan. The company is regulated by the Abu Dhabi Global Market regulator, the Financial Services Regulatory Authority.
Trustee services include ensuring the funds within the Plan are used only as per the Plan’s Trust Deed. This forms the “rules” of what the Plan can and cannot do.
Praxis also acts as the Administrators of the Plan, having experience of almost 50 years in providing administration of similar offerings globally. This includes providing the underlying servicing and management of the Plan itself.
Your funds will be held within the Trust, and from there you can decide what underlying investments are held. This can be local cash deposits with UAE banks, to retail investment funds within the EU, UK or USA.
Investment decisions will always be made by you, as neither Praxis or Daman are licensed or regulated to provide any investment advice. We will never make any investment decisions on your behalf.
You can opt to simply leave your balance entirely in cash should you prefer, within either local bank deposits within the UAE, or retail liquidity funds within the EU.
Praxis have been in operation for over 50 years, in over multiple countries worldwide, and are licensed and regulated to provide a number of services, including Trustee, Corporate and Private Client services.
Within the UAE, Praxis is licensed by the Financial Services Regulatory Authority for the purpose of Trust Services.
Trusts are created by an individual or entity transferring assets (and therefore being a Settlor or Grantor of the Trust), such as property, cash or chattels, to a third party, who will manage the assets for the Settlor’s beneficiaries.
Legal ownership and control is retained by appointing a Trustee, who will manage the assets in the interests of the Settlor’s beneficiaries.
In short, a Trust is set up by a Settlor, managed by a Trustee, and benefits the beneficiaries.
Abu Dhabi Global Market, or “ADGM”, is an international financial centre and Free Zone located within Abu Dhabi .
The financial centre was established in 2013 and operational by 2015, and is considered an independent jurisdiction within the UAE which includes its own laws and regulations.
The Financial Regulator of the ADGM, the Financial Services Regulatory Authority, or “FSRA”, provides regulatory oversight to Trustee companies. PraxisIFM Trust Ltd has been licensed by FSRA for Trustee provisions since 2016.
Both Praxis and Daman are unable to provide any investment advice. Any investment decisions must be taken by yourself. If you are uncertain as to what investments are most suitable for you, we would recommend that you seek dedicated Financial Advice on this matter.
Investment return is determined by the performance of the investments you have selected. Return can be affected by the risk profile selected, investment horizon and the nature of the investment itself.
Investments involve risk. Your investment value can go down as well as up, and you may not receive back the amount you originally invested if your investments have underperformed.
Praxis cannot confirm nor guarantee any investment returns. Any investment decisions are made wholly by yourself, at your own discretion or with the advice of a suitable financial professional.
It is prudent to note that investment returns are never guaranteed, and that any illustration provided by Praxis is for reference purposes only.
Past performance of investments is also not indicative of potential future returns.
Your investments and contributions can be monitored via your investment portal 24/7, which can be accessed
The Plan provides employer reporting on a quarterly basis. This reporting will detail how much of your liability has been funded, how long it will take to fund the remainder liability, and how many of your employees are utilising the Savings Plan.
Employers only need to provide the monthly datasheet, alongside their funding obligations.
The primary purpose of the Plan is to fund the company’s Gratuity Liability. If you wish to close the Plan, kindly contact us on [email protected].