The Bottom Line / Eat, drink, be merry
As part of the general atmosphere of "eat and drink at the public's expense," the outgoing CEO of the new Mivtachim pension fund, Shlomi Attias, has demanded severance pay of NIS 1.2 million - after only eighteen months of work.
The fund's chairman, Shmuel Slavin, fired Attias for his lack of compatibility for the job. Attias, who was an appointment of Histadrut labor federation chair Amir Peretz, was not an appropriate choice for CEO in a developing, competitive market, in which there is a war over every customer.
Attias claims that according to his contract he is entitled to severance pay worth 19 monthly salaries. This is in addition to a number of sweeteners such as a 10 percent bonus for an additional pay grade and a one-time payment for leaving before age 65. The absurd result is that the severance he is demanding is greater than his total pay as CEO.
Slavin is using technical arguments to invalidate Attias' contract: He claims the contract was never approved by the board of directors of the fund or by the general assembly. But the real reason he is trying to cancel it is the absurdity of paying damages of NIS 1.2 million for such a short, and not especially successful period.
Slavin is attempting to set more reasonable standards for severance packages. He has stuck his finger in the dike - for which he should be praised - because every shekel Attias receives over and above the norm comes from the pensions of the fund's members.
Even in the veteran pension funds there is never a dull moment, either. A report was presented to the CEO of the Central Pension Fund this week, showing that the average salary cost of a worker at the fund is NIS 25,000 a month. The employees received significant additions to their salaries over the years in return for efficiency measures, even though in reality the number of workers rose and the amount of work dropped, as the number of fund members was halved when they moved to the new Meitavit fund.
The fund, which was owned by the Histadrut, was very generous to its workers - at the expense of the members. Severance pay reached 300 percent in some cases, while global overtime hit 125 hours a month. Ordinary mortals receive child allowances from the state until age 18, but the fund continued the allowances until age 21.
The fund also contributed to financing life insurance and supplemental health insurance policies. It granted employees four theater tickets a year, a subscription to the Am Oved publishing house, scholarships toward university tuition fees of workers' children, toward daycare expenses, food vouchers, day camp expenses for children, car expenses, parking, and finally for dessert: glasses every other year payed for by the fund. And all this while the fund was carrying a NIS 15 billion actuarial deficit.
The employees have been interfering with the fund's work for the past two weeks in protest against the CEO's plan to fire 10 workers and cut back on salary expenses and fringe benefits. The workers need to internalize the fact that the good old days of a union controlled fund with enormous deficits has ended.