Israel Spends More Than NIS 72 Million on Security Service Retirees Each Month

State-funded pensions for all current and future state retirees are expected to cost the state a total of NIS 572 billion, says deputy finance minister.

Israel has 2,646 retirees who receive state-funded pensions of more than NIS 30,000 a month, Deputy Finance Minister Mickey Levy told the Knesset on Tuesday. Of them, about 2,400 were career officers in one of the security services – the army, police, Mossad or Shin Bet.

State-funded pensions are financed entirely out of the government’s annual budget, without the employee having contributed anything to his pension plan. The total number of former state employees currently receiving such pensions is estimated at 150,000 to 160,000.

Two weeks ago, Haaretz published a report on which former state employees from outside the security services receive the highest pensions, ranging from NIS 40,000 to NIS 86,000 a month. That report led MK Moshe Feiglin (Likud) to ask the Finance Ministry for additional information on the matter.

On Tuesday, Levy responded to the inquiry from the floor of the Knesset. His data showed that the vast majority of those receiving the highest pensions are veterans of the security services, though judges were also well-represented.

Levy also said that state-funded pensions for current and future retirees are expected to cost the state a total of NIS 572 billion. But that doesn’t include the additional NIS 300 million in pension obligations racked up by other public bodies, such as municipalities, government companies and universities.

In 2012, the government paid out NIS 18.4 billion in state-funded pensions – about NIS 1.5 billion less than it had budgeted for. This year, the sum is expected to reach NIS 20.1 billion. The figure will then continue climbing until it peaks at NIS 26 billion in 2032. But after that, it is expected to start declining, thanks to the decision a few years ago to transfer all state employees to defined-contribution pension funds.

Feiglin asked why the highest pensions couldn’t be trimmed: “If it’s permissible to cut from children’s scraps of bread, why isn’t it possible to cut from a pension of NIS 30,000?”

Levy responded that the treasury has been striving for the past two decades to reduce state-funded pensions, but every change requires the consent of the Histadrut labor federation.

Ofer Vaknin