The retirement will gradually rise to 64 for women in three stages, and to 67 for men, under the Retirement Age Law (5764-2004), passed by the Knesset in its third reading last night. The law conforms to the Ministry of Finance-Histadrut (General Federation of Labor in Israel) agreement on raising the retirement age, signed two days earlier.
The retirement age for men will be raised by four months a year until 2009, when it be 67.
The retirement age for women will be raised in three stages through 2017. In the first stage, the retirement age will be raised by four months a year to the age of 62 in 2009. It will then remain unchanged for two years through 2011. In the third stage, the retirement age will again be raised by four months a year from 2012 through 2017, to the age of 64.
The estimated cost of the Ministry of Finance's concessions to the Histadrut and delaying the raising of the retirement age for women is at least NIS 5.3 billion. This sum will be added to the amount Minister of Finance Benjamin Netanyahu has pledged to rescue the pension funds.
The agreement with the Histadrut to rescue the pension funds includes the following clauses, which are being published for the first time:
- A 2% ceiling will be imposed on the increase in the real wage for the purpose of calculating pensions, beginning in October 2003. The ceiling will not apply to people who retired between March 1996 and October 2003.
- Management fees paid by pensioners will be gradually raised to 1.75% from 2007, instead of the Ministry of Finance's original demand of 2%.
- The increase in contributions to pension funds by employers and employees will be the same - 1.5% for each, instead of the 1% by employers and 2% by employees originally demanded by the Ministry of Finance. The increase will be implemented gradually through 2007.
Published by Globes [online] - www.globes.co.il - on January 8, 2004