Finance Minister Moshe Kahlon and the inspector of the market of pension insurance Dorit, Selinger announced a new reform, aimed at reducing the commissions charged by pension funds.
In the framework of reform of the Ministry of Finance will hold among pension funds tender for the provision of services, where the main criteria are low fees and Fund size (preference will be given to funds, controlling less than 5% of the market).
The winner of the tender will be for three years the pension Fund «by default». This means that all new employees in Israel, the retirement savings program will be automatically opened in the Fund, if the employer failed to obtain the best conditions in another Fund.
The employer is seeking for their employees the best conditions in another Fund, will be required to hold an open tender.
The rate of Commission offered by the winner of the tender will be valid for five years from the date of opening of the program.
Currently hundreds of thousands of workers without major representative, are forced to pay fees in the maximum the rate prescribed by law – 6% of current contributions and 0.5% of the accumulated amount.