The mandatory pension law was recently updated (Sept 7, 2010).
Originally planned for gradual annual updates from 2008 – 2013, when the mandatory % will reach 15% (5% employee, 5% employer and 5% severance pay -employer)
The new revision now ads another year (2014).
Starting Jan 1, 2014 the mandatory pension will be 17.50% as follows:
employee – 5.5 %
employer – 6.0 %
employer (pension) – 6%
The mandatory pension revision also specifies:
1) that it applies to employees who retired at retirement age and receive a stipend from social security (Bituach Leumi).
2) An employee who begins work at a new place of employment and is insured in a pension plan from his previous place of employment, will be eligible to receive continuation of the existing plan and it’s percentages from day one with the new employer, provided there is no break in monthly payments. If there is a break, the mandatory pension law will apply.
see the full wording of the original mandatory pension plan here:
http://www.payrollisrael.com/node/49
In answer to David:
I need to be a bit more explicit on this. thanks for the heads up question.
If a new employee was not previously insured in a bituach menahalim or pension program, or his previous insurance is “inactive” (meaning that there was a lapse between the last month he/she was insured and the first month of work for you) then the mandatory pension law applies in full. If the employee continued the policy on his own after leaving previous place of work (risk) this keeps the policy alive and you would need to continue it as it exists – see below.
If the employee has an active plan and there is retzef – example: he worked for company A with a pension plan until 30/04/2010 and started work with you in May 2010 – you need to continue the existing plan with it’s existing percentages.
This is easily done. ask the employee to show you a printout of the statement from the pension company (this can be obtained on-line immediately) they also send out quarterly reports to every member.
Moshe
Yes it does, Also if the policy from the previous place of employment had higher percentages than the mandatory pension plan, the new employer would need to continue the previous plan and it’s percentages. This of course is provided that the previous policy is still “live”, or continuous.
Magnificent goods from you, man. I’ve take into accout your stuff previous to and you’re just too fantastic. I actually like what you have received here, really like what you are stating and the way in which by which you assert it. You are making it entertaining and you continue to take care of to stay it wise. I can’t wait to read much more from you. This is actually a terrific web site.
Just want to say your article is as astounding. The clarity in your post is simply nice and i can assume you are an expert on this subject.
Fine with your permission let me to grab your RSS feed to keep updated with forthcoming post.
Thanks a million and please carry on the rewarding work.