Investment Houses Association against Shamkhon's pension plan: 'A dangerous gamble'

The Investment Houses Association opposes Prof. Avi Shamkhon's proposal to cancel the mandatory pension contributions for workers up to age 40, warning of harm to pension savings and deepening social gaps.

The Investment Houses Association is coming out against the proposal of the chairman of the National Economic Council, Prof. Avi Shamkhon, to cancel the mandatory pension contributions for workers up to age 40. In a letter sent by the association's CEO, Adv. Nimrod Sapir, it is argued that the move could harm workers' pension savings, deepen social gaps, and significantly reduce future pension benefits. Under the proposal, workers would be exempt from contributing their share to pension (6% of salary) until age 40, while employer contributions would remain. The National Economic Council estimates that the move would increase net salary by about 500 shekels per month on average, but would lead to a decrease in future pension benefits. The association points to overly optimistic assumptions in the plan, such as a real wage increase of 1.5% per year, and offers alternatives to increase disposable income, such as targeted relief for workers at certain salary levels or tax reductions.