Under the National Insurance Institute law, every three years, the organization’s actuary must present a report containing the forecast and expectation for payments and pensions to the residents of Israel. The institute must also ensure the ability to meet its obligations and the rights granted to citizens by law. The institute’s recent report is tailored to the end of 2022, and at the request of Labor Minister Yoav Ben-Tzur, it will be updated following the events of the war.
According to the report recently published to the public, from the year 2030 and onwards, National Insurance is expected to be forced to retrieve billions of shekels to fulfill all its payment obligations. By 2036, the fund is expected to be fully depleted without additional funding, and National Insurance will not be able to fulfill all its legal obligations to residents of Israel. The dependency ratio of the elderly population that will require pensions and senior care is expected to increase from 25.5% in 2023 to 32.6% in 2065.
Ben-Tzur makes statement defending citizens’ rights
According to the previous actuarial projection, the fund’s balance was expected to be depleted in 2044. This report was pushed forward to 2036 as per the mandatory reforms in disability and care pensions, population growth, and longer life expectancy in Israel compared to other developed countries. Even before the COVID-19 outbreak, the National Insurance Insitute raised this issue, a topic extensively covered by Maariv, seeking to discuss the matter and ensure the continuation of public rights over the years.
However, the government did not manage to properly address the crisis. Surplus funds from the National Insurance, amounting to tens of billions of shekels in the past decades, were transferred to the state treasury for other needs. According to Ben-Tzur: “The independence of the National Insurance Institute and the continuation of payments to Israeli residents are essential in a moral and orderly society. I brought all relevant parties together to try to reach appropriate solutions, with a clear statement that cutting benefits will not happen under my watch. Elderly citizens, people with disabilities, unemployed, and the like will not be harmed.”
