Supervisor of Capital Markets, Insurance and Savings Yadin Antebi and Finance Committee chairman MK Stas Misezhnikov (Yisrael Beitenu) have reached a compromise on the launch date of the pension portability reform. The reform will be implemented in full for all pension instruments in January 2009. The reform will permit the transfer of money between different pension instruments and pension providers - provident funds, pension funds, and executive insurance - without the transfer being considered a tax event or the paying of a fine. The Finance Committee still has to approve the compromise.
Antebi and Misezhnikov agreed, with the consent of the insurance companies, that the reform will apply to provident and pension funds beginning on July 1, 2008, and on executive insurance beginning on January 1, 2009. Currently, it is possible to transfer money from one provident fund to another or from one pension fund to another.
Under the compromise, beginning next year, it will be possible to transfer money from capital provident funds to annuity pension funds, although it will not be possible to transfer money in the other direction, which the Ministry of Finance does not permit under its pension portability proposal.
When the Ministry of Finance announced the reform in July 2006, it planned for full implementation by mid-2008. However, Misezhnikov said that it could not be implemented before 2009 because the insurance companies were not ready. The parties therefore agreed to a six-month delay.
Antebi said today, "It's no matter if the reform is delayed by six months. This should have been done since 1991, so a six-month delay won't matter." The Ministry of Finance sees the delay as a reasonable compromise and as an achievement.
Published by Globes [online], Israel business news - www.globes-online.com - on February 11, 2008
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