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The only thing the CEO of insurance company Menorah would say yesterday was "we made the deal of a lifetime."

Ari Kelman doesn't want to sound like he's on the defensive, but it is evident that many at the company think the NIS 710 million Menorah paid for Mivtachim's new pension fund was inflated. This argument will likely continue for years to come. As we have already learned about the pension sector from the entire actuarial deficit fiasco, even a small change in working assumptions has dramatic impact on the numbers.

Second, it is hard to project how the pension market will develop in the coming years as it undergoes a series of revolutions, as the banks market pensions and life insurance, as well as major tax reform, although clearly the pension market is growing much faster than executive insurance and provident funds.

Third, the management component will also play a deciding role. If Menorah continues to produce the best returns in the market, it was worth it for Menorah to pay more than the others.

"I have no logical explanation for these prices. There is nothing to justify them," one leading appraiser said in a conversation with Haaretz on Sunday. To be more precise, the source continued, any justification would not lie with concrete expectations of returns, but of access to a broad client base. Financial grounds alone could not justify the checks the companies cut for the funds. What they do have, especially Mivtachim, is a huge roster of names.

The buyers' associates, who have many explanations from the way the pension funds were valued, also reject that claim or at least the working assumptions used.

For instance, the average wage. The premiums paid into pension funds by workers are a derivative of their salaries. Until now, workers and their employers have contributed 17.5 percent of monthly wages to a pension fund and clearly if the average is on its way up, then the pension funds' receivables will also head north. In addition, new regulations allow workers to contribute up to 20.5 percent and get the entire tax break, which means even if the average wage doesn't rise, receivables might anyway.

Another relevant parameter that impacted the valuations was the young average age of members of the new funds, which opened in 1995.

New Mivtachim now has 440,000 members, 200,000 of whom are inactive. Inactive members have left places of employment that worked with the fund, not including those who retired, or have opted for other savings plans. The fund collects 0.5 percent of the sum accrued for them, but has no expenses for these members. The pension funds call these monies "the bonanza" as few inactive members demand any services from the fund.

Mivtachim has set aside NIS 2 billion for inactive members of its total NIS 11 billion under management. That money contributes NIS 10 million to revenues without anyone having to work for it.

These inactive members are also not bombarded by competing offers as most have left the large factories where they were once targeted by rivals.

And with all the criticism of Menorah for paying too much for Mivtachim, it is now clear that the highest price was really paid by Clal Insurance for the Meitavit fund. If we apply our professional's explanation that the only way to evaluate a fund is through its client list and assets under management, we see that the highest price was paid for Meitavit. The piddling NIS 135 million amounted to a very high "per member" figure of NIS 1,931. Kelman can boast that Menorah paid just NIS 1,613 per Mivtachim member. The lowest figure goes to Makefet, which went for NIS 1,313 per member.