Israelis’ long-term savings up 10% in 2023

The public’s long-term retirement and savings assets rose by about 10% last year, reaching NIS 2.5 trillion, according to the comprehensive report published by the Capital Markets, Insurance and Savings Authority, headed by Amit Gal, for 2023.

Last year was a turbulent one for Israelis and the Israeli economy, but growth in long-term savings was rapid. Public pension fund assets grew 11% to NIS 1.2 trillion by year’s end, with new pension fund assets rising 20% ​​to NIS 727 billion.

The largest amount deposited into the new (comprehensive) pension funds was with the Menora Mivtachim funds – NIS 15.4 billion in 2023, representing a 23% increase over the year. It was followed by Harel, with NIS 12.7 billion deposited into its funds, representing a 16% increase, and in third place was Phoenix Holdings, with NIS 9.76 billion deposited, representing a 33% increase. The largest percentage increase was for the pension funds of Mor Investment House, which began operating in April 2022, with NIS 383 million deposited into it last year, an increase of 377%.

Low management fees

Other encouraging figures suggest that average management fees as a percentage of assets have been on a downward trend over the past five years. In life insurance policies, the average management fee fell from 0.94% in 2019 to 0.81% in 2023; in savings funds, it fell from 0.57% to 0.53%; and in new pension funds, it fell from 0.21% to 0.16%. Management fees as a percentage of deposits in pension funds fell from an average of 2.12% in 2019 to 1.63% last year.

The lowest average management fees as a percentage of overall pension fund assets were in the Ayalon Meitav fund, at 0.1%, followed by the Atsholer Shaham fund, at 0.13%, while the highest fees were in the small pension fund Infinity, at 0.19%, and among the large funds, 0.17% in the Harel and Migdal funds.

Last year, the Slice savings funds affair erupted. A wave of complaints from the public and suspicions of management failures led to an investigation being opened into Slice in early 2023. At the end of last year, chartered accountant Effie Sandrov was appointed as the company’s special manager. The Capital Markets, Insurance and Savings Authority has also frozen withdrawals from all Slice funds (about NIS 4 billion) several times, this year as well.

“The Authority is working to ensure a fair and safe environment for financial consumers in a field that is characterized by significant disparities in power and knowledge,” said Capital Markets, Insurance and Savings Commissioner Amit Gal in a statement on the occasion of the report’s release. “Through professional supervision and appropriate allocation of resources, we will be able to continue to maintain a competitive, advanced and leading market in accordance with international standards, which will continue to support the growth of the Israeli economy.”

This article was published in Globes, Israeli Business News – en.globes.co.il – on September 24, 2024.

© Copyright Globes Publisher Itonut (1983) Ltd., 2024.

This article was published in Globes, Israeli Business News – en.globes.co.il – on September 24, 2024.

© Copyright Globes Publisher Itonut (1983) Ltd., 2024.