The Ministry of Finance capital markets, insurance and savings division head Yadin Antebi today published for the first time a draft of regulations of personalized provident funds in Israel, similar to the US Individual Retirement Account (IRA).
The operation of these funds is an additional step in the reforms carried out in recent years in the pension savings field, led by the Ministry of Finance. The ministry's intention to enact such regulations was first reported in "Globes."
Minister of Finance Abraham Hirchson noted today that personalized provident funds would offer an innovative model whereby, for the first time, the individual would be able to decide in which assets to invest his pension savings, without any limitations.
Hirchson added that the individual would be exclusively responsible for investment decisions regarding his finances, whether he will choose to manage his investments by himself, or through a preferred portfolio manager.
Antebi said that giving individuals the possibility to manage their own finances will increase household involvement in the capital markets, will increase financial awareness among those involved and will increase the number of investment decision makers in the market, which will encourage both Israeli and foreign institutions to develop products and services for this new market, thereby making the Israeli capital market more competitive, efficient and sophisticated.
The IRA is a popular savings plan in the US available to individuals since the 1980s. Every holder of a US Social Security Number can open such a plan and invest money through it in mutual funds. These personalized pension savings allow each person to determine their personal needs, investment profile and desired level of risk.
Published by Globes [online], Israel business news - www.globes.co.il - on December 12, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006