In what is being hailed as a "significant breakthrough" in the social relations of the country's labor sector, Industry, Trade and Labor Minister Eli Yishai on Sunday issued an extension order expanding the collective pension agreement introduced by the Histadrut in July to include all of the country's workers and not only those who work in large enterprises.
"This is a very, very significant and important issue for all of the country's workers," Uriel Lynn, president of the Federation of Israeli Chambers Commerce, told The Jerusalem Post.
"Until now, workers in small- and medium-sized companies were not included in the pension agreement and now they will be guaranteed a pension."
In addition, Yishai reduced the number of minimum months a worker must be employed before being eligible to receive a pension from nine to six and lowered the minimum age for pension eligibility from 21 to 18.
While the reduction in the number of months has already been approved by the Federation of Israeli Economic Cooperation, a representative group of the country's largest economic organizations, the minimum age requirement is still under negotiation. According to Lynn, who is a member of the FIEC, however, they are considering it very "favorably" right now and expect to reach a final decision sometime next week.
Once the FIEC approves the age reduction, they can amend the collective agreement and Yishai can issue another extension order, Lynn said.
As detailed in the agreement signed in July, beginning in January 2008 employees who have been working at the same company for at least six months will be immediately eligible to start receiving payments into their pension plans, beginning with allocations of 2.5 percent of their monthly salary, with this number increasing to 5% in 2009, 7.5% in 2010, 10% in 2011, 12.5% in 2012 and 15% in 2013.
Once Yishai issues the second extension order, those companies that fail to provide employees with the appropriate pension plan will be subject to prosecution in a court of law.
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