Pensions in Israel

Pensions in Israel consist of a state pension system and a private pension system which employees are legally required to participate in and that is supervised and regulated by the government.

State pensions

The state pension system is administered by Bituah Leumi (National Insurance Institute). All residents aged 18 or older are required by law to pay insurance contributions to Bituach Leumi as part of the Old Age Insurance system.[1] Upon reaching retirement age and claiming the pension, contributors are means-tested, with those above certain income levels entitled to only a partial pension or no pension at all until age 70. The basic old age pension is NIS 1,531 for an individual and NIS 2,301 for a couple (composed of the pension for an individual with an increment for the spouse). Upon reaching age 80, this increases to NIS 1,617 for an individual and NIS 2,387 for a couple. Health insurance contributions are deducted at the rate of NIS 196 for an individual and NIS 283 for a couple. For those not entitled to income supplements, the health insurance deduction is NIS 103 for both individuals and couples. Additional increments, income supplements, and heating grants are available to those deemed in need of them.[2]

Old age pensions are paid via bank transfers on the 28th of every month.[3]

Private pension system

As per a 2008 law, all salaried employees not covered by collectively-bargained pension plans between employers and labor unions are legally required to have private pension funds to which they and their employers must contribute to.[4] Israel is planning to expand this law to cover independent contractors and the self-employed.[5]

References

  1. ↑ "Insurance Contributions". btl.gov.il. Retrieved 22 April 2016.
  2. ↑ "Benefits - Old-Age, National Insurance Institute". btl.gov.il. Retrieved 22 April 2016.
  3. ↑ https://www.btl.gov.il/English%20Homepage/Benefits/Old%20Age%20Insurance/Pages/default.aspx
  4. ↑ "Pensions: An International Journal - Pension reform in Israel under mandatory pension law". palgrave-journals.com. Retrieved 22 April 2016.
  5. ↑ http://www.globes.co.il/en/article-kahlon-unveils-pension-plan-for-self-employed-israelis-1001119587
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