Ministry of Finance promotes: The management fee for retirees at retirement age will be reduced to 0.3%

The Minister of Finance today (Tuesday) submitted for approval to the Knesset Finance Committee an amendment to the management fee regulations in order to set a lower management fee ceiling than that currently set in the regulations for pensioners, which currently stands at 0.5%, for the benefit of retirees retiring in Israel.

The ceiling of the management fee to be paid by a pensioner who begins to receive an old-age pension, from the date of determination of regulations from comprehensive and general pension funds, or from insurance policies issued under an insurance fund, shall not exceed 0.3% per year, similar to the ceiling set by the Capital Market Commissioner. Insurance and savings in the competitive procedure for selecting a selected pension fund.

Following regulatory reforms made in the pension savings market in recent years that have led to increased competition in the market, we are witnessing a significant decrease in the rate of average management fees actually paid by members during the savings period.
For example, the average management fee in pensions currently stands at a rate of about 1.95% of deposits and at a rate of about 0.2% of the accrual. Also, most members do not pay the maximum management fee set by the regulations. However, this change has not yet found significant expression as expected even in the management fees paid by retirees, most of whom still pay the maximum management fee. The purpose of this move is to bring significant change and a discount that is also guaranteed for the Israeli pensioners.

The Minister of Finance, Avigdor Lieberman: The decision is another step in favor of the public of pensioners retiring in the State of Israel, which will lead to additional savings of hundreds and even thousands of shekels a year. The decision does justice to the senior citizens who have worked and saved all these years and will now enjoy the benefits of saving, with for a significant number of them it is a lifestyle sub-step. We will continue to care for our parents, grandparents out of genuine concern for the standard of living of the elderly population in Israel. “

D"Rabbi Moshe Barkat, who is in charge of the capital market, insurance and savings: “I thank the Minister of Finance, Avigdor Lieberman, for promoting this important move. Lowering the management fee ceiling for retirees is a complementary step to the default fund procedure, in which it is determined that at retirement the maximum management fee will be about 0.3%. In this step we make sure that all retirees will enjoy a guaranteed discount on management fees, which will lead to an increase in retirement benefits. The Authority will continue to promote the welfare of savers, along with maximizing the rights of all members and savers in Israel. “

Illustration. Photo: pixabay

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