Mad Hon · Pension savings

Check you are getting the pension you are owed

Check you are getting the pension you are owed. A step-by-step Mad Hon guide for your Pension savings score, written for olim.

1. Know what the employer actually owes you.
Since 2008 an expansion order has required every employer to insure an employee in a pension arrangement. It applies from age 21 for a man and 20 for a woman. Contributions begin after six months of employment, and immediately on the first day for someone who arrives already insured under an existing Israeli pension arrangement, paid retroactively after three months of work or at the end of the tax year, whichever comes first. The combined minimum is 18.5 percent of insured salary: 6 percent from you, 6.5 percent from the employer, and 6 percent towards severance. One nuance that catches people out: the order measures the obligation on your salary or on the average wage in the economy, whichever is lower, so an employer paying the minimum on a salary above that average is not necessarily in breach.
2. Read the pension block on your payslip.
The tlush maskoret carries a section for provident and pension deductions with three separate lines: your contribution, the employer contribution, and the severance component, pitzuyim. Add the three and divide by the insured salary. Insured salary is not the same as gross pay: allowances such as a car, a phone or a meal card usually sit outside it. Most payslips print the insured salary as its own line. If yours does not, ask payroll which components they calculate the contribution on, and ask in writing.
3. Check the waiting period before you conclude anything is wrong.
This is the most common false alarm for an oleh, and it is the same rule that makes a low first-year figure look alarming. An employee with no earlier Israeli pension only starts accruing after six months in the role. If you already had an Israeli fund from a previous job, the wait does not apply to you and contributions should have started on day one, which is worth checking rather than assuming, because payroll systems apply the six-month default unless somebody tells them otherwise. Telling them is a one-line email with your existing fund details.
4. Confirm the money reached the fund, not just the payslip.
A deduction printed on a payslip is a statement of intent, not proof of a deposit. Open your account with the managing company, or read the periodic statement it sends you, and compare the deposits recorded there against the payslips for the same months. A gap between the two is a different and more serious problem from a low rate, and it needs the dates and amounts written down before you raise it.
5. If something is missing, escalate in order and in writing.
Start with payroll or HR, in an email rather than a conversation, setting out the months in question and asking for the correction and the arrears. Keep the reply. If it goes nowhere, the Capital Market, Insurance and Savings Authority takes public enquiries about pension arrangements, and the Ministry of Labour runs the enforcement arm for employment law. The labour court is the step after those. Claims are subject to a limitation period, so a gap you have noticed is worth raising now rather than filing away.
6. Once the floor is secure, the rate above it is a separate question.
The statutory minimum is a floor, not a target. Whether to contribute above it depends on your marginal tax rate, how much room you have against the ceilings for tax-favoured deposits, and what else the money would be doing. That is its own decision, and it is worth taking only after you know the base is actually being paid.

Check you are getting the pension you are owed. A step-by-step Mad Hon guide for your Pension savings score, written for olim.

1. Know what the employer actually owes you.

Since 2008 an expansion order has required every employer to insure an employee in a pension arrangement. It applies from age 21 for a man and 20 for a woman. Contributions begin after six months of employment, and immediately on the first day for someone who arrives already insured under an existing Israeli pension arrangement, paid retroactively after three months of work or at the end of the tax year, whichever comes first. The combined minimum is 18.5 percent of insured salary: 6 percent from you, 6.5 percent from the employer, and 6 percent towards severance. One nuance that catches people out: the order measures the obligation on your salary or on the average wage in the economy, whichever is lower, so an employer paying the minimum on a salary above that average is not necessarily in breach.

2. Read the pension block on your payslip.

The tlush maskoret carries a section for provident and pension deductions with three separate lines: your contribution, the employer contribution, and the severance component, pitzuyim. Add the three and divide by the insured salary. Insured salary is not the same as gross pay: allowances such as a car, a phone or a meal card usually sit outside it. Most payslips print the insured salary as its own line. If yours does not, ask payroll which components they calculate the contribution on, and ask in writing.

3. Check the waiting period before you conclude anything is wrong.

This is the most common false alarm for an oleh, and it is the same rule that makes a low first-year figure look alarming. An employee with no earlier Israeli pension only starts accruing after six months in the role. If you already had an Israeli fund from a previous job, the wait does not apply to you and contributions should have started on day one, which is worth checking rather than assuming, because payroll systems apply the six-month default unless somebody tells them otherwise. Telling them is a one-line email with your existing fund details.

4. Confirm the money reached the fund, not just the payslip.

A deduction printed on a payslip is a statement of intent, not proof of a deposit. Open your account with the managing company, or read the periodic statement it sends you, and compare the deposits recorded there against the payslips for the same months. A gap between the two is a different and more serious problem from a low rate, and it needs the dates and amounts written down before you raise it.

5. If something is missing, escalate in order and in writing.

Start with payroll or HR, in an email rather than a conversation, setting out the months in question and asking for the correction and the arrears. Keep the reply. If it goes nowhere, the Capital Market, Insurance and Savings Authority takes public enquiries about pension arrangements, and the Ministry of Labour runs the enforcement arm for employment law. The labour court is the step after those. Claims are subject to a limitation period, so a gap you have noticed is worth raising now rather than filing away.

6. Once the floor is secure, the rate above it is a separate question.

The statutory minimum is a floor, not a target. Whether to contribute above it depends on your marginal tax rate, how much room you have against the ceilings for tax-favoured deposits, and what else the money would be doing. That is its own decision, and it is worth taking only after you know the base is actually being paid.