New plan would protect long-term savers

The Treasury would advance a broad regulatory reform that will specify investment tracks dependent on age, which will reduce risk.

Ronnie Bar On 88 248 (photo credit: Ariel Jerozolimski)
Ronnie Bar On 88 248
(photo credit: Ariel Jerozolimski)
Finance Minister Ronnie Bar-On on Tuesday unveiled a broad pension reform for the protection of the public's long-term savings. He said the Treasury would advance a broad regulatory reform that will specify investment tracks dependent on age, which will reduce risk in the investment portfolio by increasing the weight of solid structures in the investment portfolio of those aged 60 and above and create tracks with lower risk and volatility. "In the long-term view, this reform is the basis for the protection of the public's pension savings," Bar-On said. "It is no secret that I am not happy about the idea of a pension safety net, and I still have differences with the prime minister over the timing of its implementation," he said at the Calcalist Pension Conference. "Its enforcement, even in its current limited format, bears a certain social injustice, and any broader format, as suggested by the Labor Party, would have only benefited the rich at the expense of taxpayers. "The financial crisis has unveiled the risks of quickly passing reforms over reforms to improve competitiveness without taking into account changes for the protection of the consumer, the saver and the investor, risk management and without adjusting proper regulation." Bar-On also criticized the Bachar capital-market reforms for failing to redefine a new regulation structure and provide an answer for the protection of savers and investors. "The lack of providing answers to the question of the protection of savers and investors has brought us to a situation in which we need to deal with demands at the expense of taxpayers and for the good of the protection of pension savings of a very focused part of the population," he said. "Within the next six months we are going to make a systematic change to the structure of pension savings funds, in particular, for funds of savers nearing retirement age." Histadrut Labor Federation chairman Ofer Eini on Tuesday called on Bar-On to resign if he doesn't accept immediate implementation of the government's pension safety-net plan. "Everyone sees how tough the situation is, but for months the finance minister is standing on his ego and nothing helps," he said. "The economic plans or reforms we are hearing about are in six months. I doubt that there is anyone who believes that he will realize them in the next term." Eini said the Histadrut would not launch a strike action planned for Wednesday and called upon Bar-On to sit down with employees' organizations and employer groups to avert more layoffs in the economy. Bank of Israel Governor Stanley Fischer on Tuesday called upon the politicians to stop wasting time and urgently approve the Treasury's economic and financial stimulus plan. "Unfortunately, the measures put forward by the Finance Ministry have not yet been presented to the Knesset and are not being put into effect, despite the consent of the prime minister," he said in Tel Aviv at the annual meeting of the Association of Publicly Traded Companies. "This is a waste of precious time that could have been used for the benefit of the economy, in particular the financial measures aimed at increasing credit availability. This is going on for three months now; in the middle of a crisis we don't have that time."