The Ministry of Finance announced today that that old pension plans administration for would operationally consolidate four nationalized old pension plans (established before January 1, 1995): Building Workers Pension Fund; Pension Fund for Agricultural Workers and Non-Professionals; Egged pension fund; and Hadassah pension fund. The consolidation will be retroactive to May 1, except for The Building Workers Pension Fund, which will be added on June 1.
The consolidation does not affect each fund's assets and liabilities. Each fund will continue to be responsible for its assets and liabilities, and will continue to operate separate investment committees. The consolidation will reduce the funds' administrations from eight to five, cut administration costs, and streamline the funds' operations.
The consolidation will be implemented by establishing an administration and services center on the basis of the Building Workers Pension Fund, which will have the employees from the four funds. The four funds' current authorized managers, Moshe Saguy and Yechiel Katz, will conclude their terms and transfer responsibility to Mivtachim Pension Fund authorized manager Adv. Yaron Arbel on June 1. Arbel will be the authorized manager of the four pension funds, as well as Mivtachim.
Supervisor of Insurance Eyal Ben-Chelouche said the operational and administrative consolidation would improve the situation of the funds' members in two main areas: better and more professional service; and lower fees, thanks to economies of scale.
Ben-Chelouche added that the Ministry of Finance was not considering additional measures at this stage, such as operationally consolidating the Makefet Fund and Histadrut pension fund. "Obviously, in the medium term, the system will be run more efficiently, exploiting economies of scale from operational and administrative consolidation, but I cannot commit to a timetable. Also, before we move forward, we'll want to study the effectiveness of the present consolidation."
Published by Globes [online] - www.globes.co.il - on May 3, 2004