The Knesset Finance Committee on Monday approved pension mobility reform, which for the first time will allow consumers to switch between different long-term savings instruments and spur competition in the local insurance sector. "Mobility among pension savings programs and pension advisory services will increase the consumer power of people saving toward retirement age and offer long-terms savers the option of selecting the most suitable pension plan according to changing needs," said Yadin Antebi, the Finance Ministry's supervisor of capital markets, insurance and savings. Implementation of pension mobility reform was delayed by four months on request of the banks; it will take effect this October instead of July. Insurance companies will have to adopt the new pension regulations starting next January. Until today, pension savers were stuck with their choice of pension plan, such as the manager insurance plan, because of penalties and other restrictions. They were trapped and could not move to alternative savings vehicles if they were not satisfied with management or wanted, for example, lower management fees. To spur competition in the insurance sector, Antebi last year released a draft capital-market reform that would allow people to shift money accrued in pension plans between companies and different types of pension vehicles, such as life insurance plans, pension funds and provident funds, at any time. As a result, money is expected to shift from one company to another in the provident and pension fund industry. Mobility among pension savings programs is putting pressure on larger insurance companies such as Migdal and Clal Insurance; they fear that many policy holders will prefer to transfer their pension savings from life insurance to pension funds. "In the short-term, the reform is good for the consumer," Alon Glazer, an analyst at Leader Capital Markets, told The Jerusalem Post Monday. "The profitability of insurance policies, mainly old policies, is much higher than that of pension plans, and thus if life insurance clients switch to pension plans or provident funds, this could damage insurance companies' future profits in the short term." Therefore, he said, insurance companies will have to be more competitive and invest in keeping clients by offering better policy terms and conditions, such as lowering their management fees, which in turn will curtail profitability. "However, it might not prove to be worthwhile for many policy holders to switch to other plans," Glazer said, "in particular, for holders of life insurance policies opened before 2001, because the terms of the old policies are better, since mortality tables were updated in 2001." But in the long-term though, he said, the gaps between the various savings instruments will ultimately narrow and within a few years, the differences between long-term savings instruments will be minimal.