Some two years after the introduction of recommendations from the Bachar committee on capital market reform and the ensuing structural changes a new study finds that one-third of the public think the banks still manage their pension savings.
The report by Israel Phoenix Assurance Ltd., conducted last May and released this week, also found that 40 percent have no pension savings.
"This study shows that a sizable part of the Israeli population is unaware of how their retirement funds are managed despite the fact that they have plenty of access to receiving information about their plans," said Dubi Ram, manager of the long-term investments branch of Phoenix. "One possibility for this is because there has not been enough time that has passed since the new reforms have been in place for people to know exactly what is going on with their pension plans."
Nevertheless, 55% are aware that they are responsible for choosing how their pension savings are managed.
The report also found that 31% of Israelis update their pension insurance after changing job, profession, or marital status, but 65% do not actively supervise the way their pension savings are being managed.
Meanwhile, more than half believe that a monthly income of NIS 4,000-8,000 would enable them to live comfortably after they retire.
"The fact that people who were interviewed for the survey answered that NIS 4,000-8,000 would be enough for them to live a comfortable lifestyle surprised us," said Yuval Bar-El, manager of the business and economics department of Phoenix's long-term investments branch. "We thought that people would want to retire with more than this."
According to the survey, nearly 70% of pensioned citizens read the yearly reports that are sent to them by their pension managers and more than 60% answered that the reports are "easily understood."
Yet, said Bar-El, the fact that so many people responded that they are unaware of who is responsible for choosing their plan did not come as a shock.
"It's just a survey and it is very likely that people who responded were not telling the truth or those with plans were not doing enough to make sure that their plan is appropriate for their needs. Also, many people might know what their plans are, but don't know who manages the plan."
In another surprise, the survey found 70% of people aged 70 and older wanted to continue working well after retirement age. "After 40 years of working, we thought people would want to take a break, but we were wrong," said Bar-El.