Provident funds continue shift to private hands

The report showed that the transfer to private bodies was mainly a result of better returns, which they achieved during the first four months of the year.

The public redeemed or transferred NIS 3.16 billion from provident funds held by banks in the first four months of this year, reflecting the continued diminution of provident fund assets held by banking bodies. In the month of April, the banks lost NIS 116m. according to a report released Wednesday by the Ministry of Finance. The assets were transferred to funds managed by private bodies, which in turn experienced an increase of NIS 2.37b. in the first four months of 2006. The report showed that the transfer to private bodies was mainly a result of better returns, which they achieved during the first four months of the year. Private bodies were at the top of the list with an accumulated yield of 5.36 percent. The funds that are managed by insurance companies achieved an accumulated yield of 4.49%, while funds held by banks only achieved an accumulated yield of 3.64%. In addition, the report disclosed a substantial increase of 38% in investments into provident fund baskets. During the first four months of the year investments into provident funds grew from NIS 4.7b. in December 2005 to NIS 6.597b. in April.