How official funded EOSB schemes differ across the GCC?

Across the GCC, policymakers are increasingly moving towards funded End-of-Service Benefits (EOSB) schemes designed to better protect employee benefits and improve portability, governance and transparency.

While these schemes share a common objective, they are not structured in the same way. Differences in scheme design, contribution structures, provider models and investment arrangements can materially influence employee outcomes over time.

What are the key differences?

Defined contribution is becoming the dominant model

Most GCC jurisdictions are moving towards Defined Contribution (DC) structures, where employee outcomes depend on contributions made and the investment performance achieved over time.

The UAE's federal scheme, DEWS in the DIFC, the ADGM framework and Oman's upcoming scheme all follow this approach.

Bahrain remains the exception. Its government-run model operates as a Defined Benefit (DB) system, where benefits are determined using the prescribed gratuity formula rather than investment performance. This difference is important because it changes who bears investment risk and how final benefits are calculated.

Treatment of accumulated gratuity varies

One of the most significant differences across schemes relates to how previously accrued gratuity is treated when an employer transitions into a funded scheme.

Some schemes provide specific guidance on accumulated gratuity treatment, while others offer greater flexibility or leave certain aspects to employer choice. The treatment adopted can have a material impact on the final benefit ultimately received by employees.

Different operating models

The UAE has adopted a private sector-led model. Employers can select from licensed providers, creating competition around investment options, service quality, reporting and employee engagement.

Bahrain and Oman, on the other hand, have taken a different approach, operating through government-run structures.

ADGM provides perhaps the greatest degree of flexibility. Rather than prescribing specific providers, employers have broader discretion when establishing arrangements, subject to employee consent.

Payout flexibility differs

Not all schemes require benefits to be withdrawn immediately when employment ends.

Some jurisdictions allow benefits to remain invested after separation from employment, enabling employees to continue participating in investment growth beyond their employment period. This may become an increasingly important feature, evolving from end-of-service funding vehicles into broader long-term savings solutions.

Voluntary contributions are becoming common

Most funded EOSB schemes now permit Additional Voluntary Contributions (AVCs). This allows employees to contribute beyond mandatory employer-funded amounts and build personal long-term savings alongside their end-of-service benefits.

Over time, AVCs could become one of the most important features of funded workplace savings systems across the region.

The key takeaway

Funded EOSB schemes are often discussed as though they are broadly similar. In reality, scheme design varies considerably across jurisdictions.

As these schemes are implemented, employee outcomes will increasingly depend on factors such as scheme design, treatment of accumulated gratuity, provider and investment choice and employee contribution behaviour.

While the objective across the GCC is broadly similar, which is to protect employee benefits, the path each country is choosing is notably different.

This article is an excerpt from the Q1 2026 GCC EOSB Monitor. Download the full publication.