Mizrahi approves generous retirement package
The board of Mizrahi-Tefahot Bank yesterday approved an agreement signed a few years ago between management and the labor union. The early retirement plan is expected to cost the bank NIS 200 million, all of which will be charged to this year's financial results. However, the bank projects that the retirement of 250 staffers - only some of whom will be replaced - will save the bank NIS 145 million.
The plan is slated for five years, but most workers are expected to retire this year, so the entire provision will be made in 2006. Mizrahi is also expected to post NIS 470 million in capital gains after the sale of its provident and mutual funds and its 25 percent stake in brokerage Excellence Nessuah.
The bank announced last month that as long as its capital adequacy was higher than 10 percent, it would distribute 80 percent of profits from one-time events and 40 percent of profits from routine operations as dividends.
Management maintains the right to veto specific workers who seek inclusion in the early retirement plan in order to retain critical staffers.
Chairman Jacob Perry said the agreement ended a year and half of labor disputes that had disrupted operations and ensured industrial calm until the end of 2010.