Washington International Law Journal


Israel’s pension system has changed drastically since the mid-1990s, when it faced an underfunding crisis. The transition to defined contribution plans permitted a wider range of investments and shifted the burden of income-replacement from the government to the individual pension plan participant. This shift required increased protections for pension plans, which led to the creation of the Capital Market Insurance and Savings Division (CMISD) to oversee and regulate pension management entities. In comparison to post-Soviet nations that experienced similar transitions from socialist to market economies, Israel’s pension system is significantly healthier and more regulated. However, the CMISD must enact measures to oversee the transition of funds from “old” to “new” pensions, reduce or eliminate the mandatory 30% investment in government bonds, and increase the accountability requirements for pension management entities and the organization itself.

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