Supervisor of Capital Markets, Insurance and Savings Yadin Antebi today presented the pension savings measures planned for implementation in 2009 aimed at dealing with the economic crisis. The plan is the result of dozens of meetings between Ministry of Finance officials and capital market players, consumer groups, unions, accountants, lawyers, and others.
The measures aim to provide better protection for the public's pension savings. Antebi said, "The crisis exposed numerous failings. I see my duty to use the crisis as an opportunity to make the necessary changes in the pension savings sector, and put the public at the center."
The measures are in two areas: consumer rights and the obligations of pension fund managers.
The obligations of pension fund managers include a thorough handling of corporate bonds. Pension fund managers will be required to obtain a threshold of information before investing in corporate bonds.
Pension fund managers will also be required to adjust investment managers' compensation to long-term performance of pension funds. Bonuses may not be based on periods of less than three years, so that they will be based on funds' long-term performance rather than on the short-term performance.
Israel will switch to the Chilean model of consumer pension rights. The number of pension and provident funds plans will be greatly reduced, and the inputs will be adjusted to the inherent level of savings. The goal is to simplify pension products and to customize them to each consumer's needs.
Antebi will set up a work team to recommend a mix of investment plans for people over the age of 60, in order to significantly reduce the volatility in their investment portfolios ahead of retirement, and to preserve the monthly retirement stipend as far as possible.
The reform also includes increased transparency on management fees and investment strategies, switching to reporting the annual yield from the monthly yield, and raising public awareness about pension savings.
Published by Globes [online], Israel business news - www.globes-online.com - on March 24, 2009
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