The new Mivtachim pension fund is awash with cash, and will be divvying up some NIS 860 million to its fortunate members. But while Nurit the nurse and Eldad the baker may be enjoying their small pile of money, those insured with other funds may be seething with envy.

However, Mivtachim's fortune is but a simple result of running a pension fund according to actuarial balances. This was the condition imposed on all the "new" funds, those set up after the veteran funds were closed to new members in 1995 having accumulated humungous actuarial deficits.

Each year the new funds' actuaries tot up future liabilities against members' contributions, and see what comes out. When the result is a deficit, members will see their pension rights reduced, but if the fund reports an actuarial surplus - such as the NIS 860 million that Mivtachim's new fund is expected to post in its 2003 report - then the funds are distributed to the members through increased pension rights.

It is all straightforward in the world of pensions, but in the Israeli sector which has seen strikes over reforms, government seizures of veteran funds and sweeping reductions in pension rights, Mivtachim is not slow to recognise its marketing opportunity, and gleefully parades its largesse to the envy of others.

But pay attention to the small print. The government has also removed its guaranteed rates of return to pension funds from 2004, so the eventual sums to share may be far smaller than the calculated NIS 860 million windfall.