The old pension funds (established before January 1, 1995) will be able to invest up to 60% of their assets overseas - an investment instrument formerly barred to them. On Tuesday, his last day in office, former Minister of Finance Benjamin Netanyahu signed an order changing the regulations for the old pension funds.
Up until now, the investment regulations allowed the old pension funds to invest at least 50% of their assets in government bonds, up to 13% in corporate bonds, 7% in discretionary investments (shares, options, etc.), and 30% in designated bonds issued by the Ministry of Finance with 4.86% guaranteed interest.
The change, Revision 4 in the income tax regulations (rules for approving and managing provident funds) will enable the funds to invest at least 60% of their assets in government bonds, loans, and deposits with a rating of at least A minus, and in overseas assets rated at least A minus. The funds will also be able to invest in Israeli bonds traded overseas. The proportion of discretionary investment will be raised to 10%.
The revision almost completely equalizes investment regulations for the old and new (established on or after January 1, 1995) pension funds.
Published by Globes [online] - www.globes.co.il - on August 11, 2005