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Histadrut, employers agree to up pension plan contributions

By JPOST.COM STAFF

SEPTEMBER 7, 2010 22:40

The Histadrut on Tuesday signed an agreement with various representatives of Israeli employer associations to raise contributions into mandatory worker pension funds.

According to the new agreement, employer and employee pension fund contributions will increase to 17.5 percent of wages by 2014. The higher rates are a continuation of planned increases in the pension contribution rate that began in 2008, raising pensions contributions from 2.5% to 7.5% of workers' wages by 2010. The contributions will now continue to grow by 2.5 percentage points per year until 2014.

Workers are still required to work nine months at a place of employment to qualify for pension benefits. Once a person qualifies for a employer-mandated pension plan, contributions into the plan will be applied retroactively from their first day of employment at the place of work.

The new agreement also added a clarification to the previous pension agreement signed by the Histadrut and employers' associations. It states that employees who qualify and receive a pension benefits plan from a previous place of work are not required to wait an additional nine months to qualify for a new workplace's pension plan.

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