Kahlon seen rejecting rise in women's retirement age

Moshe Kahlon photo: Tamar Matsafi
Moshe Kahlon photo: Tamar Matsafi

The retirement age for women in Israel is among the lowest in Western countries.

The committee for raising the retirement age for woman has failed in its task. Sources inform "Globes" that Minister of Finance Moshe Kahlon told committee members that he was considering rejecting its recommendations, which were submitted to him today. Sources involved in the committee's work said that its 12 members had not reached agreement on any of the topics on its agenda, headed by the questions of whether to raise the retirement age, and if so, to what age, and how to compensate women liable to be harmed by the decision.

The largest gaps between the parties were between the Bank of Israel, which believes that the retirement age should be the same for men and women, and should be linked to life expectancy, and the committee members from the Histadrut (General Federation of Labor in Israel) and women's rights organizations, which opposed raising the retirement age. The Ministry of Finance, which supports raising the retirement age for women to 67, was willing to settle for raising it gradually to 64, but this compromise failed to achieve complete agreement among the committee members.

The current retirement age for women is 62, one of the lowest in Western countries, after many countries raised the retirement age in recent years. Women can ask to continue working until 67. Raising the retirement age is liable to affect women who lose their employment at age 62, because they will have to wait for years before receiving a pension.

Kahlon appointed the committee in March this year. Headed by the Ministry of Finance budget director, the committee included six representatives of the government and the Bank of Israel and six representatives of the public from the Adva Center, the Injaz NGO, the Vehadarta NGO, the Manufacturers Association of Israel, the Naamat women's organization, and Adv. Yuval Elbashan, an academic.

The committee's mandate was to set the age for eligibility for National Insurance Institute senior citizen allowances and monthly payments from a pension fund (or executive insurance). The current age for eligibility is 62 for women and 67 for men.

The committee recommended raising the age for women to 64 over eight years at the rate of three months a year. Most of the committee members supported this plan, which would raise the retirement age for women to 67 within 40 years.

The main reasons for raising the retirement age cited by the Bank of Israel were that experience shows that raising the retirement age increases the employment rate among women over 60 and their salary levels. In addition, the Bank of Israel presented figures showing that the monthly pension would rise by 8% for each year that retirement is postponed.

The Bank of Israel also provided a comparison showing that the retirement age for women was lower than 62 in only eight of the 34 OECD countries. Assuming that the currently prevailing international policy of gradually raising the retirement age is implemented until 2030, only three countries besides Israel will have a retirement age for women of 62 or less: Chile (60), Poland (60), and Slovenia (61).

As of now, the basic senior citizen allowance is NIS 1,531 a month. There are various additions to this, including seniority (2% a year), an allowance postponement supplement (5% a year), and supplements for dependent spouses. The average senior citizen allowance for women in 2014 was NIS 2,160. The allowance is paid in full to those whose monthly income is up to NIS 5,394, and in part to those whose income is between NIS 5,394 and NIS 21,579. Starting at age 70 for men and age 66 for women (born in May 1950), senior citizens are entitled to a full allowance, regardless of their income.

Published by Globes [online], Israel business news - www.globes-online.com - on September 29, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Moshe Kahlon photo: Tamar Matsafi
Moshe Kahlon photo: Tamar Matsafi
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