Economy

National Economic Council Proposes Pausing Employee Pension Deposits Until 40

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The National Economic Council is proposing that employees under 40 stop making their 6% pension contribution by default, while retaining an option to keep paying, with full mandatory deposits resuming at 40. Employers would continue contributing 6.5% for benefits and 6% for severance, while the change is estimated to add about NIS 500 to an average younger employee's monthly disposable income. The council's model projects average gross retirement income falling from NIS 17,000 to NIS 14,900 and the average net replacement ratio from 1.09 to 0.97. The proposal is on the Prime Minister's Office table, but cannot be implemented during the present government's remaining term and is expected to face Finance Ministry opposition.

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