You Have More Choice Than You Think
Many olim accept whatever pension fund their first employer sets up for them and never think about it again. This is a costly default. Israeli pension law gives you the right to choose your fund manager, transfer between managers without tax penalties, and adjust your investment track at any time. Using these rights intelligently can add tens of thousands of shekels to your retirement savings.
The Major Fund Managers
Israel has around a dozen licensed pension fund managers. The largest and most established include:
- Meitav (מיטב): Consistently strong returns, competitive fees, good online platform with English support
- Altshuler Shaham (אלטשולר שחם): Known for long-term outperformance, particularly in equity-heavy tracks
- Menorah (מנורה): Large insurer with a broad product range, strong disability coverage
- Harel (הראל): Major insurer with extensive service network
- Migdal (מגדל): One of the largest fund managers by assets
- Phoenix (פניקס): Strong track record, active investment management
- IBI (אי.בי.אי): Competitive fees, popular among younger investors
None of these managers is consistently best across all metrics — returns, fees, and service quality vary by product type and period. The comparison process matters.
Criterion 1: Returns History
The תשואה (Tsuaa) — investment return — is the most visible comparison point, but it requires careful interpretation:
- Look at 5-year and 10-year returns, not just the last year. Short-term outperformance often reflects market conditions or risk-taking rather than genuine skill.
- Compare like-for-like investment tracks. An equity-heavy track will have higher returns and higher volatility than a balanced track. Make sure you are comparing the same track type across managers.
- Net returns matter, not gross. A fund that earns 8% before fees and charges 0.8% is worse than one that earns 7.8% and charges 0.3%.
- Gemel Net (גמל נט) is the Israeli government's free comparison tool. It allows you to compare net returns across all licensed pension and savings fund managers by track and time period. Use it.
Criterion 2: Management Fees
Fees have more impact on your final pension balance than most people realize. A complete section on this follows in the pension fees article, but the key numbers for comparison:
- Annual savings fee (dmei nihul mitchaber): Charged on your total accumulated balance. The regulated maximum is 0.5%. Good funds are at 0.2-0.35%.
- Deposit fee (dmei nihul mipkida): Charged on each new contribution. Maximum 6%, but negotiated rates are often 0.5-2% for salaried employees. Aim for zero on new contributions if possible.
As your balance grows, the savings fee dominates. When you are young with a small balance, the deposit fee matters more. Track both.
Criterion 3: Disability and Survivor Coverage
Within a קרן פנסיה (Keren Pensia), part of your monthly contribution (typically around 2-3% of covered salary) funds insurance rather than savings. In exchange, you receive:
- Disability pension: If you are unable to work due to illness or injury, the fund pays a monthly income (typically 75% of insured salary)
- Survivor pension: Your spouse and dependent children receive ongoing monthly payments if you die while a member
Different funds offer different coverage levels and claim procedures. When evaluating funds, ask specifically about the maximum insured salary, the definition of disability used (own occupation vs. any occupation), and the claims process. Funds with poor claims handling or restrictive definitions of disability provide less real protection despite looking similar on paper.
How to Transfer Your Pension
If you decide to transfer your existing pension balance to a new fund manager, the process is straightforward and has no tax consequences. You submit a transfer request (טופס העברת כספים) to the new fund manager, and they handle the transfer directly with your previous manager. The process takes 2-4 weeks.
Important: do not withdraw the pension and then reinvest — that triggers a tax event. Always use the formal transfer process between managers.
Practical Starting Point
Open Gemel Net, select "קרן פנסיה" (Keren Pensia), choose the investment track that matches your age and risk tolerance (for most working-age olim, an equity-heavy track for younger workers, transitioning to balanced as you approach retirement), and compare the net 5-year returns and total annual fees across the top managers. Focus on the three or four with consistently competitive returns and below-average fees. Then make a call.
Spending two hours on this comparison can easily be worth 50,000-100,000 NIS over a 25-year savings horizon. It is one of the highest-impact financial decisions you will make in Israel.