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Pensions for members of the "veteran" pension funds who have taken early retirement or who worked on a part-time basis will be improved under a deal reached between the Finance Ministry and the Histadrut labor federation. The two sides agreed to several changes in the conditions of those covered by the veteran pension funds - funds that were closed in 1995, and were nationalized last year after accruing huge actuarial deficits.

Among the changes:

l Early retirees - they will receive their pensions at the original retirement age of 65 for men and 60 for women, and not the higher ages set by last year's pension reforms. In addition, employers of early retirees may also exercise the option of continuing contributions to pension funds for employees, even after their retirement date.

l Part-timers - the treasury backed down from its original changes that calculated pension payments according to a formula that averaged employment history over the individual's entire history and penalized those who had only worked part-time.

l Disabled pensioners - the treasury had relied on the pension funds, particularly the veteran Mivtachim fund, for medical examinations of all those on severe disability allowances. In many cases, criteria for receiving the allowances were no longer found. In these cases, the payments were reduced or stopped. Now, under the agreement between the government and the Histadrut, these disability allowances will be reinstated to those who had been receiving them for at least five years, including those who had reached early retirement age at the time of the cuts.

Part of the change in heart being displayed by the treasury may have come in response to a lawsuit filed by retired members of the pension funds. In a recent ruling, the Haifa Labor Court recommended that Attorney General Menachem Mazuz reexamine the policy of cutting pensions for those who are classified as disabled.