Staff Pension Scheme for Al Hathboor staff

Al Hathboor Group, one of the UAE’s most successful diversified conglomerates, has implemented a staff pension scheme for 600 managers at the company. The scheme, which augments the state end-of-term gratuity system, means that qualifying Al Hathboor staff will receive a payment at the end of their service that has been properly funded and managed. HSBC is acting as adviser, trustee, custodian, administrator, record keeper, and fund manager of the scheme.

“Currently, employers are not funding their staff’s end-of-service gratuities, and are instead paying their liabilities as they arise from working capital,” said M Salahuddin, CEO of Al Hathboor Group. “By setting up a properly administered and managed fund, Al Hathboor is adopting world-class standards of corporate governance, and is accounting correctly for its staff pension liabilities,” he added.

“This move reflects the transformation of Al Hathboor from a local business house to a modern conglomerate that implements global standards at all levels,” said V Jaiganesh, Group Finance Manager at Al Hathboor.
In addition to enhancing its governance standards, Al Hathboor Group also sees the move as a valuable tool in attracting and retaining skilled staff.

“By offering a corporate pension scheme, we are making a statement to our people: that they are highly valued and that their welfare and contentment is a Boardroom issue at Al Hathboor,” added Jaiganesh.

“Employee pension schemes in the GCC are virtually non-existent,” said Simon Stirzaker, Manager Employee Benefits at HSBC. “Staff have to rely on the end-of-service gratuity for their pension, which usually is an unfunded liability for their employer. Al HathboorAl HathboorLoading…’s move is highly significant for the region, since it shows a prominent local player taking steps to adopt best practice. Our view is that the majority of employers in the GCC will have adopted similar pension schemes by 2012,” he added.

HSBC likens the employee pension scheme market to the employee healthcare market: ten years ago, it was highly unusual to find an employer providing healthcare benefits; today private medical insurance is the norm for most.

“HSBC’s view is that employee pension schemes will take off across the Gulf in the next two to three years,” says Stirzaker. “This will be a highly significant development and is another sign of the growing maturity of these markets.”

HSBC Bank Middle East Limited has 37 branches throughout the United Arab Emirates, Oman, Bahrain, Qatar, Kuwait, Jordan, Lebanon and the Palestinian Autonomous Area, including an offshore banking unit in Bahrain. In addition to the branch network the Bank maintains representative offices in Tehran, Iran and Tripoli, Libya. This extensive regional coverage is strengthened by another member of the HSBC Group, HSBC Bank Egypt SAE, and by its associated companies,The Saudi British Bank, British Arab Commercial Bank Limited, and HSBC Saudi Arabia Limited.