Cabinet set to okay pension safety net

Plan will apply to those aged 57 and over with accrued pension savings of up to NIS 1.5 million.

Bar-On cabinet 248.88 (photo credit: Ariel Jerozolimski [file])
Bar-On cabinet 248.88
(photo credit: Ariel Jerozolimski [file])
The cabinet is expected to approve a limited pension safety plan on Sunday, paving the way for the long-awaited implementation of the Finance Ministry's economic and financial stimulus plans, Treasury sources said. Over the weekend, Finance Minister Ronnie Bar-On warned that any further delay of the ministry's multi-billion dollar program to invest in infrastructure and ease the credit crunch would make it harder for the economy to cope with the global financial crisis. Bar-On, who opposes immediate implementation of the safety net, as proposed by Prime Minister Ehud Olmert, is expected to discuss the last remaining point of dispute with the ministers, its timing. The Knesset Finance Committee will convene on Monday to discuss and vote on both the safety net and economic stimulus plans. It has been holding up approval of the stimulus plan for several weeks due to disagreements over the pension initiative. Last week, Olmert and Bar-On reached a compromise on protection to be provided to pension savers. Accordingly, the plan will apply to those aged 57 and over with accrued pension savings of up to NIS 1.5 million. However, it will guarantee a maximum of only NIS 750,000 for those at the highest savings level, which is equivalent to approximately NIS 8,000 in monthly income - the average wage. Pension savers with accrued funds of between NIS 1.25 and NIS 1.5m. will have NIS 600,000 guaranteed. The plan will not be retroactive and will not apply to savers holding "old" pension funds, budgeted pension funds or executive insurance funds (bituach minhalim).