The Histadrut labor federation and the Federation of Israeli Economic Organizations signed an agreement Thursday providing pension rights for salaried workers.

The agreement will take effect on January 1. After the Minister of Trade, Industry and
Employment issues an order on the matter, it will encompass about a million salaried employees.

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Among those in the new deal are private-sector workers in a wide range of industries including light industry; stores of all types; offices including lawyers, accountants and architects; hairdressers, bakeries and real estate agencies, as well as restaurants and various entertainment businesses.

The agreement does not include the million and a half employees who already have pension benefits such as public-sector employees and workers in large factories connected to the Manufacturers Association, as well as hotel workers and employees of manpower companies.

Histadrut Chairman Ofer Eini described the agreement as a historic event that will benefit many of the lowest paid workers. He said that the deal benefited the employers as well as their workers.

Eini said the agreement will make the treasury's proposed mandatory pensions superfluous.

Shraga Brosh, the head of FIEO and the president of the Manufacturers Association, said: "For 30 years they have been talking in Israel of a pension for all workers and only now is it becoming a reality."

The pension plan will be implemented gradually so as not to be too large a burden on employers. In the first year employers will put aside 2.5 percent of the employee's salary for a pension, and this figure will rise to 15 percent by the end of the fifth year.

The plan will apply to all workers who have no other pension arrangements. Men will be required to join from age 21, and women from 20, after having been on the job for nine months.