Report: Most Israelis Clueless on Their Pension Plans

YERUSHALAYIM -

A national pension law requires that all working Israelis have a pension savings plan, with contributions made by both workers and employers. But a new poll by the Social Finance Israel and Greeneye organizations indicate that 61 percent of pension holders have no idea where there pension money is invested. The representative sample of 601 Israelis included 400 within a range of the average Israeli salary, as well as 201 with higher incomes.

Thanks to that law, the poll showed, 89.3 percent of Israelis have a pension fund. Pension funds are the most common form of savings among Israelis, accounting for 81 percent of all money in savings. And 59 percent of Israelis have an Education Fund, a supplemental savings plan that workers and employers contribute to that can be redeemed after seven years. Among high earners, 78 percent have education funds.

Pension plans are closely regulated in Israel, and are supposed to invest money in safe, conservative investment vehicles. Such vehicles traditionally do not pay high rates of interest, and the poll showed that about half of pension holders were satisfied with that. The other half said that if they could choose, they would pick a pension fund that provided higher returns, albeit while maintaining investment safety.

This is the first time a poll of this type has been conducted. Nearly all the respondents said that they would make a greater effort to learn more about their pension funds, and that they were interested in maintaining a closer eye on it.