National Bonds Capital Protected Shari’a Compliant Fund
ALTERNATIVE END-OF-SERVICE BENEFIT SYSTEM (SAVINGS SCHEME) FAQs
1. What is the End-of-Service Benefits Savings Scheme?
The End-of-Service Benefits (EOSB) Savings scheme is a voluntary end-of-service savings scheme through which the end-of-service benefits of employees are invested in reputable investment funds, enabling them to receive returns upon completion of their service.
Employers choosing to participate in the scheme will need to contribute monthly to an investment fund. These contributions will entitle beneficiaries (employees) to receive the allocated basic subscription amount, along with any investment returns generated, in place of their end-of-service benefits.
2. What is National Bonds?
National Bonds Corporation Sole Proprietorship P.S.C. (“National Bonds”) was launched in 2006 with a mission to promote a savings culture that will benefit the people of the UAE. National Bonds is 100% owned by the Investment Corporation of Dubai (ICD), the sovereign investment arm of Dubai Government. It is licensed and supervised by the Securities and Commodities (“SCA”) Authority and audited by Dubai Government Financial Audit Authority, Shari’a Supervisory Board, as well as reputable international external auditors.
National Bonds has been approved as a Fund Investment Manager to provide investment management services related to the Savings Scheme for employers who volunteer to invest their employees’ end-of-service benefits under the End-of-Service Program (“Savings Scheme”) sponsored by the UAE Ministry of Human Resources and Emiratisation (“MOHRE”)
3. What is National Bonds Capital Protected Shari’a Compliant Fund (alternative end-of-service benefit system Savings scheme)?
National Bonds Capital Protected Shari’a Compliant Fund is a fund managed by National Bonds and is part of the UAE Government approved alternative end-of-service benefits scheme.
With the Fund, companies can invest their employees’ end-of-service benefits and monitor the performance via a digital and interactive platform. National Bonds aims to distribute regular returns to unit-holders.
There are several key advantages for employers when they invest. With an experienced investment manager, the fund offers capital protection while adhering to Shari’a compliance. It provides competitive returns, helping businesses streamline their operations and reduce operational costs. Additionally, by offering this fund as part of employee benefits, employers can create a more attractive workplace.
4. What is the operating framework of National Bonds Capital Protected Shari’a Compliant Fund?
National Bonds Capital Protected Shari’a Compliant Fund operates in collaboration with top tier financial service providers, including but not limited to:
• Fund Manager and Scheme Registrar – National Bonds
• Fund Administrator – Standard Chartered Bank
• Auditor – Ernst & Young Global Limited
• Legal Advisor – Baker McKenzie
• Shari'a Supervisory Advisor – Minhaj Advisory
5. What product is offered under The Fund?
National Bonds Capital Protected Shari’a Compliant Fund offers employers subscription for both skilled and unskilled workers, as defined by MOHRE.
6. Who can enroll for the alternative end-of-service benefits savings scheme under the National Bonds Capital Protected Shari’a Compliant Fund?
Voluntary subscription can be made by the employee through the employer who is an existing Unit-holder, up to a maximum of 25% of annual salary per year, in line with the Savings Scheme rules defined by MOHRE . While voluntary contributions are allowed within the scheme, this feature will not be initially offered under National Bonds end-of-service Fund program. Once this functionality is made available, communication to that effect will be issued accordingly.
7. What does capital protection entail?
The Fund operates as a local investment fund with an investment strategy carefully designed to protect the Fund’s capital from investment risks, and ultimately return it, along with any profits, to Unit-holders on a future date specified in the offering document. The capital protection extended as part of the Fund's offering is mainly tied to the underlying investments and its credit profile, thereby providing assurance regarding the Fund Manager's capacity to achieve the maximum level of protection to Unit-holders’ capital.
The Fund is not guaranteed by the Fund Manager, an insurance company or any financial institution.
8. What does the National Bonds Capital Protected Shari’a Compliant Fund invest in?
The Fund invests in Shari’a-compliant deposits with banks licensed by the UAE Central Bank and in sovereign Sukuks issued by the UAE’s Federal and Local Governments.
9. What is the anticipated return on the National Bonds Capital Protected Shari’a Compliant Fund?
The Fund will seek to provide a money-market like return to investors, net of fund management costs and operational expenses.
10. What are the annual management charges associated with investing in the National Bonds End-of-Service Capital Protected Fund?
An annual management fee of 0.75% of The Fund’s assets under management is applicable under this program.
11. Are dividends and distributions paid out to investors?
The Fund's profit will be calculated and distributed to Unit-holders daily. Dividends are distributed by issuing new units to Unit-holders on the business day following the dividend distribution date. Fractional units (up to approximately four decimal places) may be issued when the distributed profit does not warrant the subscription of a full unit. No subscription fees are levied for the issuance of these units. Dividends are disbursed from accrued profits generated or borne by the Management Company, at its discretion.
12. What are the benefits of subscribing to the National Bonds Capital Protected Shari’a Compliant Fund for employers?
1. Unique investment opportunity backed by National Bonds’ expertise and experience
National Bonds Capital Protected Shari’a Compliant Fund offers the following advantages to the employers who choose this option:
- Anticipated profit distributed to employees on a daily basis.
- Control of redemption in line with MOHRE guidelines.
- Shari’a Compliant.
- Capital Protected through its underlying investment strategy.
- User friendly and seamless experience through its portal.
2. Optional Employer Top-Up Contributions
- Employers can enrich their employees' benefits package by opting to contribute beyond the standard entitlement. This flexibility enables
employers to provide greater support to their staff, reinforcing their commitment to employee wellbeing.
3. Reduced administrative burden
- The National Bonds Capital Protected Shari’a Compliant Fund manages the end of service benefits seamlessly and efficiently through its expertise in scheme administration reducing the administrative burden on companies allowing them to focus on growth and development.
4. Enhanced talent acquisition and retention
- Employers benefit from National Bonds Capital Protected Shari’a Compliant Fund by way of enhancing financial wellbeing and hence productivity and job satisfaction of their employees. This is not only effective in attracting top talent but also crucial in retaining them, providing a significant advantage in today’s competitive job market.
13. What is the process for subscribing to the National Bonds End-of-Service Capital Protected Fund Voluntary Savings Scheme?
1. Choosing the fund and Registration:
- Following approval, the employer chooses an approved investment fund.
- In this case, it is National Bonds Capital Protected Shari’a Compliant Fund.
- The employer signs up for the Savings Scheme through the MOHRE website.
2. Investment Agreement:
- The Company signs the investment agreement with National Bonds, the latter being the Fund Manager and Registry Administrator.
3. Subscription mechanism:
-Through the system, the fund gives the employer a user name to involve workers who want to invest in the fund.
- Informing the establishment on the method of transferring subscription amounts.
- Providing the employer with the ability to view the establishment’s account in the fund.
- Pay the subscription for the employer he wishes to register.
4. Periodic transfer of subscription amounts:
- The company periodically transfers subscription amounts to the Fund as per the MOHRE and the Fund’s terms.
5. Electronic data transmission:
- The MOHRE electronically transmits the data of participating employees and companies to the Registry Administrator.
- Providing employers and workers with electronic data statements.
The National Bonds End-of-Service Capital Protected Fund aims to grow employees’ savings and provide expected investment returns, thus boosting the economic impact of the employer and the worker in the UAE.
For more information, please feel free to ask further questions by calling 600-522279 or email us at mohre@nationalbonds.ae
14. How can employees redeem their investments in the National Bonds Capital Protected Shari’a Compliant Fund?
In order for an employee to redeem his/her investments once he/she has left employment with the employer, the latter must pay the employee’s final month’s contribution and enter an exit date detailing the employee’s last day of service in their upload file on the NB portal. Employers must also ensure their employees’ contact and personal details are up-to-date and accurate. An automated leaver email is then sent to the employee through the digital portal and he/she is given the option to remain invested or request a full or partial withdrawal.
Employees can choose to stay invested in the Scheme, managing their accounts and benefits via the user-friendly portal.
15. Are there any penalties or fees for redemptions of units?
There is no redemption fee or penalties applicable in case of redemption of units.
16. As an employee, how can I access my account statement for National Bonds Capital protected Shari’a Compliant Fund under this scheme?
All registered employers will be able to provide their employees with access to the employee portal that will display the investment and profit details for each employee privately.
17. In case of any queries, who can I reach out to?
For queries or for more information, please contact our client service center at
600 522279
or email us at
mohre@nationalbonds.ae