PM rejects 'inadequate' Treasury pension plan

Olmert allays fears that the upcoming elections will in any way influence a future financial bailout plan.

November 26, 2008 09:38
2 minute read.
PM rejects 'inadequate' Treasury pension plan

OLMERT BUSH 248 88. (photo credit: AP)


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Prime Minister Ehud Olmert on Wednesday night declined to approve the Treasury's limited pension safety net plan in favor of a broader program, in an effort to avert a general strike in the public sector. "Olmert did not approve the pension safety net presented but ordered the Finance Ministry to schedule a meeting on Thursday with representatives of the Bank of Israel and Prof. Emanuel Trachtenberg [head of the National Economic Council in the Prime Minister's Office] to formulate an improved pension plan. At the same time, Olmert approved the financial stimulus measures the Treasury unveiled on Tuesday," a Finance Ministry official said. On Tuesday, the Treasury presented a NIS 11 billion plan to intervene in the capital markets and ease the credit crunch, in an effort to help distressed companies survive and avert layoffs. Finance Minister Ronnie Bar-On met with Olmert upon his return from Washington on Wednesday evening to discuss the Treasury's plan for a limited pension safety net. The discussions, which were scheduled to be finalized within an hour, after which Olmert was expected to present the plan to the press, took more than three hours, during which news over the decision to indict Olmert evolved. Following the new turn of events, Olmert decided to keep his doors closed. The Treasury's emerging pension safety plan would cost an estimated NIS 10b. and reportedly cover only a few tens of thousands of savers. It is expected to cover pension savers aged 60 and older who earn less than twice the minimum wage, or about NIS 7,700 a month. The safety net will not be retroactive but will guarantee savings only from the date on which the Knesset approves it. Olmert has expressed dissatisfaction with the Treasury plan and is calling for a more extended program to which Bar-On can commit to and more important, that the Histadrut Labor Federation will accept so that a general strike can be averted. One of the proposals put forward by Olmert is to expand the beneficiaries by lowering the age limit to 55. The Histadrut on Tuesday officially approved the declaration of a work dispute in the public sector, in protest of the Treasury's refusal to provide a broad pension safety net. By law, federation can now call a general strike in two weeks that would close the public sector as well as part of the private sector, for example, the banks. "Ofer [Histadrut chairman Ofer Eini], you can not force this. It will not work. A strike action will not force it. You know as good as I do that a strike during this period will be a disaster," Bar-On said at the Sderot Conference on Social Issues on Tuesday. "It will not work because the issues are more complicated."

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