At the end of 2012, the government's total commitment to unfunded pension was NIS 668 billion over the next 20 years. The government currently pays NIS 20 billion a year in unfunded pensions, one of the largest items in the budget, and the figure will rise to NIS 26.2 billion in 2032.
The heavy unfunded pension cost does not include the universities, government companies (such as Israel Electric Corporation (IEC) (TASE: ELEC.B22), Israel Railways, and the seaports), local government, and the Bank of Israel, even though these pensions are financed from the state budget, albeit indirectly through these institutions' budgets. When these pensions are included, the annual pension cost rises to NIS 25-30 billion.
As life expectancy lengthens, the pension cost rises, as will be seen in the government's financial statement for 2013, which will be published later this year.
According to the government's latest financial statements 44% of the pension commitment is for defense establishment pensioners and employees (the Ministry of Defense, IDF, Mossad, Israel Security Agency, of which only the IDF has released full figures). 56% is for other public officials, including ministers, MKs, judges, and Bank of Israel employees.
The judiciary tops the pensions table, at over NIS 50,000 a month, headed by former Supreme Court presidents and justices, and former presidents of the Chief Rabbinical Council. The largest pension goes to former President of the Supreme Court Judge Meir Shamgar (88), with a monthly pension of NIS 86,000. He is followed by a former president of the Chief Rabbinical Council (96), who receives a monthly pension of NIS 79,000. Taking into account the retirement age of 65 (which was raised to 67 in 2003, assuming that a person does not continue working), the unfunded pension of this former president of the Chief Rabbinical Council is NIS 30 million. The last two presidents of the Supreme Court, Judge Dorit Beinisch and Judge Aharon Barak, receive a monthly pension of NIS 60,083 and NIS 58,382, respectively.
The Ministry of Finance has provided a list of top pensioners among civil servants, but the figures are much more modest, apparently because most civil servants, in contrast to judiciary employees, did not spend their entire careers in public service.
Published by Globes [online], Israel business news - www.globes-online.com - on April 2, 2014
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