End of service gratuity reform in the Middle East: global lessons on the role of technology


Executive Summary

An End of Service Gratuity (EoSG) is a severance payment granted to employees at the end of their employment contract within the Gulf Cooperation Council (GCC) region. Rather than being a traditional form of pension savings, the EoSG serves as a substitute for the pension benefits that employees might miss out on while working in the GCC. This unique system, however, has its challenges, placing unstructured financial burdens on employers and leaving employees uncertain about their financial futures.

However, the reform of the EoSG system presents the GCC with a golden opportunity to innovate and pioneer large-scale Defined Contribution (DC) savings systems. Instead of merely making adjustments to existing practices, the GCC can lead the way in retirement savings, creating a benchmark for global best practice. Embracing this change holds the potential to establish significant new investment vehicles, secure individual financial futures while simultaneously strengthening the regional economy.

Gulf Cooperation Council (GCC): member states