The largest IDF pension tender for career officers and NCOs has been decided with the IDF awarding the tender to Harel Insurance Investments and Financial Services Ltd. (TASE: HARL), which is controlled by the Hamburger family. Harel beat out Ayalon Holding Ltd. (TASE: AYAL), which bid together with Psagot Investment House Ltd..
The IDF's pension tender is drawing much attention because of its great importance to both the many career officers and NCOs, and the pension savings market. The results of the tender could change the nature of the pension market, and the tender winner could become one of the largest in the market within a few years, since it would enjoy deposits of at least NIS 300 million a year.
This amount is expected to grow significantly over the years, since more and more career officers and NCOs are receiving cumulative pensions, and the amount of deposits will grow greatly to NIS 1.5 billion a year in 10 years. In effect, this is the last chance to achieve relatively quick leadership in the pension field, without having to acquire an institutional body.
Since 2004, Migdal Makefet of Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) and Magen Zahav have been handling career officers and NCOs' cumulative pension funds. The IDF tender was issued in January 2010, following many years of delays, and the two largest companies in the insurance sector - Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) and Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) - unexpectedly decided not to bid for the tender. Investment house Apex also decided not to bid. Results from the first phase of the tender were published last November, when Ayalon and Harel's competitors, The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), Excellence Investments Ltd. (TASE: EXCE), and Menorah Mivtachim Holdings Ltd. (TASE: MORA) were eliminated.
Published by Globes [online], Israel business news - www.globes-online.com - on June 22, 2011
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