A new retirement model for those serving in Israel's security forces has been agreed between the Ministry of Finance and the Ministry of Defense. There will be a new exit opportunity for officers after 14 years of service (age 35-36). At this point half of the Israel Defense Force (IDF) majors will retire with a grant of several hundred thousand shekels (up to NIS 500,000) but no bridging pension. The remaining officers can retire from the IDF from 42 onwards and will continue to receive the bridging pension currently received by officers until the age of 67 for men and 63 for women.
Another group of officers that remain in the IDF after the age of 35-36 that work in civilian professions such as lawyers and economists will undergo "civilianization" and will serve the IDF as government employees until the age of retirement as set by law. This group will grow by 32 job positions annually for seven years until 224 people are employed annually. A third group - non-commissioned officers (NCOs) will continue to serve until aged 53, and then receive a bridging pension until retirement age, as set by law.
The Ministry of Finance and Ministry of Defense are still in dispute over several issues of principle including the 12 salaries awarded to those who retire early, which raises the accumulative budget pension received from 67 onwards.
Defense budget will grow annually
Regarding the size of the defense budget, it was decided that it will total NIS 56.1 billion in 2016, and grow by NIS 3 billion if the Ministry of Defense implements a series of streamlining measures and increased transparency. In 2017-2020, the defense budget will total NIS 59 billion each year with a fixed annual rise of NIS 370 million, although the reason for this is unclear. NIS 300,000 will also be added each year from 2016, subject to the implementation of the army's new retirement plan. In addition to these amounts, the Ministry of Defense will receive a budget rise linked to the Consumer Price Index (CPI), and salary hikes linked to the public sector and exchange rate.
The Ministry of Defense's main achievement is that a range of national projects have been taken out of the defense budget and will be separately funded by the Ministry of Finance. These include the transfer of army bases to the Negev, the transfer to the Communications Center in Beersheva and the transfer to the intelligence Center at the Shoket Junction, equipping and implementing the plan to protect the offshore gas rigs and Israel's economic waters, building an eastern fence along the Israel-Jordanian border, vacating the Israel Military Industry plant at Ramat Hasharon, additional salary payments for conscripted soldiers, assurances regarding the shortening of conscripted service for young men to two and a half years, and "new agreements," which probably refer to future government decisions that will impose budgetary costs on the army above and beyond its current duties.
Published by Globes [online], Israel business news - www.globes-online.com - on January 11, 2016
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