Does employee choice matter in EOSB and workplace savings?

During a recent panel discussion on the future of End-of-Service Benefits (EOSB) and workplace savings hosted by Sukoon Workplace Savings, the DIFC Insurance Association and Capital Club Dubai, Nisha Braganza, Founder and CEO of Vestora, was asked:

"What is one practical step employers could take this year to better align workplace savings with their talent strategy?"

Her response was surprisingly simple: give employees choice, and the education needed to make an informed choice.

According to Braganza, workplace savings can become a more meaningful employee benefit when employees are given some flexibility over how their savings are managed, rather than being automatically enrolled into a single plan without consideration of individual preferences.

She explained that where regulations permit it, employers have an opportunity to move beyond a one-size-fits-all approach and allow employees to select an EOSB plan that best aligns with their personal financial goals and preferences.

Braganza's view is that when employers offer choice, they acknowledge that every employee has different financial goals, and they give employees a chance to align their EOSB savings with their long-term priorities.

Furthermore, it creates an opportunity for employers to support better financial outcomes through basic financial education and engagement. This way employers differentiate themselves from organisations that continue to approach EOSB as a purely administrative or compliance exercise. Simply offering choice and education can turn EOSB savings into a meaningful employee benefit.

Admittedly, offering choice may create some additional work for HR teams by having to manage two EOSB plans, which is more complex than operating a single plan. However, the additional effort is often outweighed by the message it sends to employees, that their preferences and long-term financial goals matter. In the DIFC, the flexibility exists within the framework. The opportunity is for employers to make the most of it.

However, she cautions that employee choice is not appropriate in every circumstance. In her view, choice works best when a scheme has reached a reasonable level of maturity and employees have access to sufficient information and knowledge to make informed decisions.

The DIFC is one such example. The EOSB savings framework has been operating since 2020 and participation levels are now well established. Employers and employees have had several years to become familiar with investment concepts and investment-linked outcomes.

By contrast, under newly introduced schemes where employee awareness and financial literacy are still developing, simplicity may be more important than choice. Offering extensive choice too early could create confusion and potentially lead to poorer decision-making.

As EOSB savings schemes continue to evolve across the UAE and wider GCC, the balance between simplicity, education and employee choice is likely to remain an important area of discussion for employers.