The Bottom Line / Don't worry, it can wait
At the end of the month, Tsippi Samet, supervisor of the capital markets, insurance and savings at the Finance Ministry, will complete her term of office after four years and three months.
At the end of the month, Tsippi Samet, supervisor of the capital markets, insurance and savings at the Finance Ministry, will complete her term of office after four years and three months. During that period, she has served four finance ministers: Yaakov Ne'eman, Meir Sheetrit, Avraham Shochat and Silvan Shalom. On average, each stayed one year in the job. That could be the main reason for Samet's difficulties in seeing reforms through in the most urgent field of pensions. The pensions market suffers from heavy actuarial deficits, from conflict of interests and managerial problems that are just waiting to explode.
True, this is not the burning issue of the day, given the military maneuvers and the economic depression which diverts our attention to the government budget deficit, but undoubtedly this is one of the economic issues that will fill the busy schedule of Samet's successor, who (for some reason) has yet to be found.
In terms of the economy, it is hard to decide which is preferable: a senior professional public servant who serves a lengthy period in office, with a finance minister replaced annually, or alternatively, a finance minister who stays fixed for some time and the senior civil servants who come and go with alarming frequency. What is clear is this turnover of government in general and finance minister in particular, harms the ability to take long-term significant decisions.
To cope with the pension funds' actuarial deficits and their distorted structures, tough decisions have to be taken which will rouse the ire of the Histadrut labor federation. In the current era of interested sectors each fighting for their political turf, it is highly unlikely for anyone to take upon himself any such momentous decision.
As a boost to the supervisor of insurance in his position, there is the opportunity to set up a supervisory body, independent of any finance minister and his political considerations. Why is it that the banking and securities markets are independently supervised, free of treasury interference? The Antitrust Authority too was subject to the Industry and Trade Ministry once, but since, has become a substantive body of presence only after winning its independence.
The supervision of insurance and capital markets is the only supervisory body of its kind that does not have a suitable department for investigations and enforcement. While the supervisor of the banks, the Securities Authority and the Antitrust Authority all have professional units for investigation and enforcement, the insurance body contracts out such services to external accountant firms. In some cases, the accountants are themselves employed by the very insurance companies and pension funds that they are hired by the authorities to investigate. The result is poor enforcement that could destabilize the insurance, pensions and funds market, which carries the lion's share of the public's long-term savings.