Most people - 70% of the population, in fact - do not know who manages their pension savings, according to a survey contracted by the Association of Banks in Israel.
Speaking at the association's annual conference with the top management of Israel's banking sector as well as Bank of Israel Governor Stanley Fischer and Supervisor of Banks Rony Hizkiyahu, association chairman Moshe Perl told participants that public awareness about their pension savings is low, and that while most prefer a low-risk management policy for their savings, most do not know what portion of their savings is invested in high-risk instruments. In addition, Perl said, most people do not know what management fees are charged to their pension savings. Some 18% of the respondents to the survey believed that their pension savings were still managed by a bank.
Perl told the conference that it is in the mutual and urgent best interest of the treasury, the public and the banks to allow the development of more in-depth and sophisticated pension advice services. "The treasury has designed the capital market in such a way that the only objective advice available is from the banking system. The banks should be allowed to provide pension advice in workplaces and factories, and increase the number of pension products they are allowed to market in order to prevent the public from making irrational decisions," he said.
Perl called to continue the reform in the pension savings sector, and develop to a point where people will be in a position to control and understand what is happening to their pension savings. "I hope the treasury will understand that this is the only way to avoid the ignorance that the survey reveals," Perl said.
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