Efforts by Ministry of Finance officials to play for time on the pension safety net issue have succeeded. At a meeting yesterday evening lasting several hours, between teams from the Ministry of Finance, the Bank of Israel, and the National Economic Council at the Prime Minister's Office, the sides failed to reach an agreement over their differences on safety net requirements for pension funds.
At the end of the meeting it was decided that the teams would continue to examine the various options based on the Ministry of Finance proposals, and will report their recommendations by next Monday to the Prime Minister, Minister of Finance and Governor of the Bank of Israel. Discussions on the issue will be renewed on the basis of their reports.
Since the Ministry of Finance first proposed the pension safety net plan, the status of the plan has been reduced in importance in the overall economic rescue plan. Ministry of Finance officials think that there is no need for a safety net, and therefore prefer to delay discussions for as long as possible.
A joint statement from the teams said, "In light of the complexity of the issue known as the 'safety net', as we examined it, and as raised during discussions, it was decided to continue examining what would be the best and most efficient safety net based on the Ministry of Finance proposal, such as when to start it, implementation, and methods of operation, if it is decided to apply the safety net. At the same time, the use of alternative instruments will be examined, and whether they would be necessary to effectively cope with the task of protecting pension savings following the crisis."
Published by Globes [online], Israel business news - www.globes-online.com - on December 2, 2008
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