Yaniv Morozovsky / CC BY-SA 4.0
Israel’s capital markets commissioner, Amit Gal, warned Sunday against cutting pension deposits or folding pension products into unified investment accounts, saying short-term moves could quickly unbalance a system Israeli savers rely on for retirement.
Speaking at the Globes “Seeing Beyond the Trend” conference, Gal told the financial daily that Israel’s pension system ranks among the world’s best in the OECD’s latest comparison, crediting it with some of the highest real returns of the past decade and relatively low management fees. “Israeli citizens should be pleased that we have an excellent pension system,” he said. “This system wasn’t born from nothing. It is very hard to build, and it must be protected.”
The comments push back on suggestions, including from National Economic Council head Prof. Avi Simhon, that Israelis may be over-saving and that deposits could be trimmed to leave more money in hand today. “There are various proposals, to cut deposits, and others touching the complexity of the tax system. These are legitimate decisions to discuss,” Gal said. “But short-term moves can upset the system very quickly.”
Gal also said the average citizen does not necessarily save enough for retirement, pointing to a labor market in which people change jobs and take breaks rather than spend 35 years with one employer. “As a regulator, unfortunately, we see cases where the citizen does not necessarily save enough,” he said, adding that policy should prevent mistakes that hurt retirement savings, particularly among lower earners.
Insurers’ agency-buying spree under review
Gal reiterated his opposition to an arbitration committee’s proposal to unify savings accounts, saying the result for customers would be “more expensive and less good.” He also said insurers’ purchases of insurance agencies have reached a very high pace and that his office is weighing how to respond if the trend continues, part of a broader concern over institutional groups growing into financial conglomerates. Oversight of holding companies, he said, is increasingly important and cannot remain a regulatory blind spot.
JBizNews Desk | Tel Aviv
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