The new comprehensive pension fund market continued its rapid growth during the first half of 2009. Assets under management grew 23% to NIS 59.3 billion from NIS 48.4 billion at the end of 2008, an increase of NIS 11 billion. Most of the growth was due to the funds' positive returns thanks to gains in capital markets.
An equally important source of growth were the NIS 5.1 billion deposited in pension funds and NIS 4.4 billion in net accumulations, which accounts for deposits, payments to investors, and money transfers within the industry.
Due to regulatory changes, including Amendment 3 to the Provident Fund Law, which turned pension savings to allotments, as well as mandatory pension regulations, combined with the massive advertising campaigns by insurance companies that control 98.6% of the new comprehensive pension fund market, pension funds are expanding their share of total public investment. This expansion mainly comes at the expense of provident funds, which are stagnating in terms of deposits and are suffering from net withdrawals, and to a lesser degree at the expense of managers' insurance.
Nonetheless, the dominance of new comprehensive pension funds in garnering the public's savings did not begin this year, but has been going on for some time. In 2008, new comprehensive pension funds had a net accumulation of NIS 8.3 billion, and deposits totaled NIS 9 billion.
The pension market share of the first place New Mivtachim Pension Fund of Menorah Mivtachim Holdings Ltd. (TASE: MORA) has fallen from 40.7% at the end of 2008 to 40.2% at the end of March and 39.7% at the end of June. Despite this decline in market share, New Mivtachim had nearly NIS 1.7 billion in deposits in the first half of the year, the third largest amount in the industry.
Published by Globes [online], Israel business news - www.globes-online.com - on July 30, 2009
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