The Histadrut (General Federation of Labor in Israel) is negotiating through a subsidiary with Israeli and foreign concerns, including Lehman Brothers, to set up a joint entity to manage its pension funds’ investments. So far as is known the parties reached an agreement in principle several months ago, before the Histadrut-Ministry of Finance negotiations at which Histadrut chairman MK Amir Perez opposed Ministry of Finance proposals to end Histadrut management of its pension funds.
Under the emerging alternative, the leading contender for managing the Histadrut pension funds is Hevrat HaOvdim subsidiary Tshuot Adar. Hevrat Ha'Ovdim is the General Co-operative Association of Labor in Israel Ltd.
Under the plan, Tshuot Adar, together with Israeli and foreign entities, would set up a joint company that will invest the pension funds’ assets in national infrastructure projects. So far as is known, the foreign entities would comprise Canadian and US Jewish businesspeople, and the Israeli entities would be construction and infrastructure companies.
The pension funds would invest only in national infrastructure projects, on the assumption that these are less risky than capital market investments, and on condition that the government provides guarantees similar to those given for Derekh Israel Highways and Cross Israel Highways Co. Proposed investments include railways and desalination facilities. The investments would be through loans or bond issues.
The Ministry of Finance and the Histadrut are continuing their negotiations over the future of the Histadrut pension funds. The negotiations with Israeli and foreign concerns have been suspended until the future of the Histadrut pension funds can be clarified.
Published by Globes [online] - www.globes.co.il - on May 18, 2003