About
The provision of ‘end-of-service gratuity’ (EOSG) payments remains a major challenge for many Middle East-based businesses. The level of gratuity is based on the individual’s salary and length of service and is payable as a lump sum. In the absence of forward planning, this can present a significant financial risk to both employers and employers.
Sovereign Corporate Services provides bespoke solutions that enables employers to build funds against their EOSG liabilities within an employee benefit trust plan. Placing EOSG provision into trust provides enhanced risk management and reduced EOSG costs through early investment. We can also incorporate a savings element within the same structure to help you attract and retain employees.
Sovereign has extensive experience in designing and operating corporate pension schemes. Our clients range from large international businesses to smaller firms just starting out. Sovereign’s team of experienced consultants is on hand to assist throughout the process, from design through to implementation. Sovereign also offers individual portable pension arrangements for internationally mobile employees and senior staff.
End-of-Service Gratuity (EOSG) Employee Benefit Plans
Companies operating in the Middle East are generally obliged to offer their staff an ‘end-of-service gratuity’ (EOSG) payment when they leave the company. The level of gratuity is based on the individual’s salary and length of service and is payable as a lump sum. Gratuity rules and terminology vary around the Gulf Cooperation Council (GCC) region but generally operate in a similar fashion.
The provision of EOSG payments remains a major challenge for Middle East-based businesses. In the absence of forward planning, it can present a significant financial risk when staff turnover is higher than anticipated or if the business lacks liquidity when payment is due. It also presents a significant risk for employees because the end-of-service benefits of every staff member are tied up in one single company, their employer.
Sovereign Corporate Services provides bespoke solutions that enables employers to build funds against their EOSG liabilities within an employee benefit plan. The objective of our approach is to take the cash and liability off the employer’s balance sheet by placing it into trust, specifically an employee benefit trust. This money can then be invested and allowed to accumulate, while EOSG payments can be withdrawn as and when required.
We can also incorporate a savings element within the same structure to help you attract and retain employees. The advantages include:
Why Choose Sovereign?
Simplicity
Sovereign’s EOSG service allows the sponsoring employer to save towards their end of service gratuity liability through an employee benefit plan, which provides a more efficient means of funding gratuity liabilities. It should be noted that this structure does not remove the employer’s end-of-service gratuity obligation, but it does provide a formal and efficient means of funding the liability.
Affordable
Our EOSG employee benefit plans can be tailored to your budget. EOSG costs should be reduced through early investment, while providing employees with better benefits will generally assist in employee retention and saves on employee replacement costs. Our aim is to minimise the cost and the administrative burden, while helping you to recruit and retain good people.
Tailored
Our EOSG employee benefit plans will be tailored to meet the exact requirements of your business and can be expanded to incorporate a savings plan within the same structure to strengthen your relationship with your employees and provide an additional benefit whilst gaining economies of scale. This would be a valuable benefit to employees because they can save easily and efficiently from payroll.
Easy to administer
Our on-line control centre puts you in instant control of all aspects of your EOSG employee benefit plan. If required, we can also provide members with a clear and concise overview and the freedom to engage directly with their account within a secure environment.
Security
Sovereign offers trust-based employee benefit plans in which the assets of the scheme are held in trust for the beneficiaries (the employees). This ensures the legal separation of the plan’s assets from those of the sponsoring employer, which provides an additional layer of comfort to employees and protects the plan from any party seeking to lay claim to the assets of the business.
Investment
Investments options are at the heart of all good employee benefit plans. We provide a range of funds from leading fund houses across different risk appetites. This is in addition to placing sustainability at the heart of our investment ethos – allowing employees to balance growth and ethics simultaneously.
Account management
Keeping up with your EOSG obligations is not just about regulatory compliance. It also involves business planning, the creation and integration of new processes, and the engagement of both the employee and employer. Sovereign has established itself as a market leader in the provision of employee benefit plans through substantial investment in our staff, systems and infrastructure. As a local provider, we will always be on hand to assist you and your employees in person.
Explore Occupational Pensions and Savings Schemes
Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.
