Analysis

The Israeli Army’s Galling Misleading of the Treasury on Pensions

The military is trying to improve career-army pensions that are already more generous than for the average Israeli.

IDF chief Gadi Eisenkot at the ceremony marking the end of the IDF officers' course.
Eliyahu Hershkovitz

The state comptroller’s report on pension policy released Wednesday revealed some amazing things about pensions in the Israel Defense Forces.

For years critics have lambasted the custom that lets the heads of the security services, including the IDF, award retirees a special pension supplement of 6 percent, ostensibly to cover the three years of their compulsory military service. (Ordinary citizens who served in the military don’t get this benefit.)

But the report highlights two things. First, the average supplement these long-time security personnel have received is an extraordinary 14.8 percent, while 98 percent get pension supplements above 6 percent. Second, this information was concealed from the Finance Ministry.

In a letter, Accountant General Michal Abadi-Boiangiu told State Comptroller Joseph Shapira that she learned in his report that for years the IDF has deliberately submitted information to mislead the treasury on the scope of pension outlays. Shapira, with remarkable understatement, writes that the military provided “partial information” and that he considers “this improper behavior” by the General Staff’s personnel branch grave.

The comptroller has uncovered nothing less than anarchy in the military’s pension policies with the acquiescence of all the recent chiefs of staff. It was disappointing to learn that this policy continued under current chief Gadi Eisenkot, who is often praised for making the military more transparent, for cooperating with the treasury, and for his willingness to make painful cuts in the IDF budget. This has included the firing of thousands of career officers as part of the multiyear plan known as Gideon.

The report makes it clear: When it comes to pensions, the military has neither been transparent nor trustworthy, and the government, rather typically, hasn’t overseen things. This doesn’t only refer to the treasury, which has been deceived, but also to the Defense Ministry, which can never seem to rein in the huge sums the army seeks to spend.

And these are huge sums indeed. If we assume that every year some 1,000 officers retire and the average pension of each retiree is around 15,000 shekels ($3,905) a month, then a 14.8 percent supplement means an additional 30 million shekels a year – spending that grows by a similar amount every year as the next group retires.

One cannot belittle the difficult conditions of many soldiers and officers in the career army, certainly the combat troops and combat support people. Such service often involves great risk and can take its toll on family life.

But this doesn’t justify these exorbitant supplements to their pensions, equal to an additional seven and a half years of work for every retiree. And don’t forget that these supplements come on top of the budget pensions that IDF veterans enjoy today. (The first to receive a new contributory pension will only retire in a decade.) There’s also the low retirement age, 47 on average, which the army seeks to gradually reduce to 42.

So the next time IDF officers shed a tear about the starvation wages of some of the noncoms in the career army, they should be asked whether the top brass could be less generous with the pension supplements for retiring officers.

The financial press will focus, justifiably, on the negative impact of these generous benefits and on the big gap between military pensions and the average person’s contributory pension.

But this extravagance comes at the expense of the IDF’s needs as well. These sums could be spent on training, equipment or the faster replenishing of the emergency stores, whose situation is in sad shape. According to the comptroller’s report, the top brass has acted like a guild protecting its members, not as responsible leaders.