Financial Services Supervision Law (Provident Funds), 5765-2005
חוק הפיקוח על שירותים פיננסיים (קופות גמל), תשס"ה-2005
Published: 2005-08-10Consolidated Hebrew text as of 2026-07-27 · Last amended 2026-07-22✓ Amendment status checked against the Knesset legislation record on 2026-09-29
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Section B: Rules of a Provident Fund
Rules of a Provident Fund§
16.
(a)A provident fund shall be managed pursuant to rules approved for it by the Commissioner.
(b)The provisions of the rules are subject to the provisions pursuant to this Law and to the provisions of any other law applicable to the management of a provident fund; a provision in the rules of a provident fund that contradicts a provision pursuant to this Law or that contradicts a provision of any other law as aforesaid shall not be followed, and it shall be deemed as if the provision pursuant to this Law or the provision of the law, as the case may be, had been prescribed in its place.
(c)Subject to the provisions of subsection (b), the rights and obligations of members in a provident fund shall be determined only in its rules, and a managing company shall not confer rights upon members of a provident fund or impose obligations upon them, otherwise than in accordance with its rules.
(c1)The Commissioner may, for the purpose of safeguarding the interests of members, issue directions regarding the rights and obligations of members in a provident fund that shall be determined in the rules of a provident fund and their formulation; directions pursuant to this subsection may be issued in respect of all provident funds, in respect of provident funds of a particular type, or in respect of provident funds for a particular purpose.
(c2)Notwithstanding the provisions of subsection (c1), directions of the Commissioner pursuant to subsection (c1) in respect of the rules of a new comprehensive fund shall be approved by the Minister of Finance and the Finance Committee of the Knesset, except for directions in respect of the said rules that arise from the adaptation of the rules to the provisions pursuant to this Law or to the provisions of any law applicable to a new comprehensive fund.
(d)The rules of a provident fund shall prescribe, inter alia, the following matters:
(1)the name of the provident fund;
(2)the purpose of the provident fund;
(3)restrictions on the admission of members, if any;
(4)the investment policy of the provident fund;
(5)the maximum rate or amount of management fees, as referred to in section 32(a), to be collected by the managing company, and in an industry-wide provident fund – a statement that the management fees shall be determined according to the expenses actually incurred by the managing company, subject to a maximum rate or amount to be prescribed in the rules;
(6)the insurances under which the members of the provident fund shall be insured, whether the insurance premiums are collected from the assets of the provident fund or from payments to the provident fund, to the extent that they shall be insured; the Minister may prescribe provisions in respect of types of such insurances and conditions in respect of such insurances;
(7)additional matters that the Commissioner has directed to be included in the rules of a provident fund.
(e)The Commissioner shall not approve for a provident fund a name that is liable to mislead.
Amendment of the Rules§
17.
(a)No amendment shall be made to the rules of a provident fund except with prior written approval from the Commissioner; an amendment to the rules for which no such approval has been given is void.
(b)Notice of an amendment to the rules shall be delivered to members or shall be published to the public, all in the manner directed by the Commissioner.
Inspection of the Rules and Delivery of Copies Thereof§
18.
(a)The rules of a provident fund and every amendment thereto shall be open for public inspection at the main offices of the managing company and at every place where the company markets the provident funds under its management.
(b)The managing company shall deliver to every new member joining a provident fund under its management, upon that member's request and without charge, a copy of the updated rules of the fund.
(c)The Commissioner may issue directions in respect of the publication of the rules of a provident fund, making them available for public inspection and delivering copies thereof.
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Contact Us →Section C: Accounts in a Provident Fund
Opening an Account in a Provident Fund§
19.
A managing company shall receive from a person requesting to join as a member of a provident fund under its management, and shall deliver to a person who has joined as a member as aforesaid, data and documents as the Commissioner shall direct.
Choice of Provident Fund§
20.
(a)An employee who is entitled to join as a member of a provident fund pursuant to any law or agreement, including a collective agreement (in this section – the law or the agreement), or to continue to be a member of a provident fund as aforesaid, may choose, at any time, any provident fund intended for the purpose of the provident fund prescribed pursuant to the law or the agreement for the purpose of depositing that employee's payments and the payments of that employee's employer, subject to the restrictions on the admission of members prescribed in the rules of the provident fund and to the restrictions on the deposit of monies pursuant to section 22, and that employee's employer shall not make the payment of monies to the provident fund on behalf of the employee and the rate of deposit on behalf of the employee conditional upon their being deposited in a particular fund, in a particular type of fund, or in a fund to be chosen by the employee from a particular list of funds, all even if otherwise prescribed in the law or in the agreement.
(a1)If a condition has been prescribed in the law or in the agreement contrary to the provisions of subsection (a), whereby the rate of deposit to a particular fund or to a particular type of fund or to a fund to be chosen from a particular list of funds shall be higher than the rate of deposit to other funds or types of funds, the employee shall be entitled to the higher of the rates of deposit prescribed as aforesaid, until the law or the agreement is amended.
(a2)An employee on whose behalf the employer deposits monies to a provident fund in accordance with the provisions of this section may choose, at any time, any licence holder for the purpose of providing pension marketing, pension advice or performing transactions in the provident fund, except for depositing monies into a provident fund, and in respect of a transaction in a provident fund to which the provisions of section 13 of the Pension Advisory and Marketing Law apply – the employee may choose to perform such a transaction other than as part of pension advice or pension marketing and not as a continuation thereof; the employer of such an employee shall not make the deposit of monies to the provident fund on behalf of the employee or the granting of any other benefit to the employee conditional upon a particular licence holder providing the employee as aforesaid with pension marketing or pension advice or performing other transactions in the provident fund on behalf of the employee.
(a3)Notwithstanding the provisions of subsection (a), if a condition has been prescribed in the law or in the agreement whereby the rate of deposit as defined in paragraph (1) of the definition of "rate of deposit" in subsection (d) (in this subsection – the rate of deposit) to a provident fund of a particular type stands at a particular rate of the employee's salary and includes a payment by the employer for the acquisition of preferred insurance at the rate required to secure 75% of the employee's salary or at a rate of 2.5% of that employee's salary, whichever is lower, and the rate of deposit pursuant to the law or the agreement to another type of provident fund stands at a lower rate, such a condition shall not be regarded as a condition imposed by the employer in respect of the rate of deposit on behalf of an employee to a particular type of fund pursuant to the said subsection, provided that the employee shall be entitled to a rate of deposit no less than the rate of deposit set out below:
(1)from the 26th of Shevat 5776 (5 February 2016) until the 24th of Sivan 5776 (30 June 2016) – the rate of deposit to the component of employer payments, as prescribed in the law or the agreement for that type of provident fund;
(2)from the 25th of Sivan 5776 (1 July 2016) until the 2nd of Tevet 5777 (31 December 2016) – 6.25%;
(3)from the 3rd of Tevet 5777 (1 January 2017) onwards – 6.5%.
(b)If a provident fund has been prescribed in the law or in the agreement, or by virtue thereof, for the purpose of depositing payments as referred to in subsection (a), and the employee has not chosen another provident fund pursuant to the provisions of this section, notwithstanding that the employee was given an opportunity to do so, the employer may deposit the said payments in that fund, in accordance with the provisions of the law or the agreement, or by virtue thereof, and in accordance with the purposes prescribed in the law or the agreement, for as long as the employee has not chosen another fund pursuant to the provisions of this section; nothing in this subsection shall exempt the employer from that employer's obligations pursuant to the law or the agreement.
(c)The Commissioner may issue directions for the implementation of this section.
(d)In this section –
"preferred insurance" – as defined in section 32(14) of the Income Tax Ordinance [New Version];
"licence holder", "pension advice" and "pension marketing" – as defined in the Pension Advisory and Marketing Law;
"provident fund" – includes an insurance plan as referred to in paragraph (8) of the definition of "type of pension product" in the Pension Advisory and Marketing Law, and includes an investment track in a multi-track provident fund, but excludes an investment track of monies in the severance pay component that do not serve in lieu of severance pay pursuant to section 14 of the Severance Pay Law, which is not the default severance pay track;
"default severance pay track" means the track that, pursuant to the rules of the multi-track provident fund, is the investment track in which the monies in the severance pay component will be managed for as long as no other investment track has been chosen, and in the absence of such a track – the track in which the largest portion of the monies in the severance pay component of the fund is managed.
"rate of deposit" – each of the following:
(1)the rate of the employer payments component, including the maximum rate of employer payments for the acquisition of preferred insurance, to which the employee is entitled pursuant to the law or the agreement, excluding employer payments to the severance pay component;
(2)the rate of employer payments to the severance pay component.
Components of a provident fund account§
21.
The Commissioner, after consulting with the Committee, may give directions with respect to the division of a provident fund account into components according to employer payments, employee payments, payments in respect of severance pay and payments by an independent member to a savings component for a state of unemployment as defined in section 2 of the Economic Efficiency Law 2017 and 2018, and with respect to a central provident fund – according to payments by an employer-member in respect of each of its employees, and directions with respect to the management of each of the said components, including directions with respect to the attribution of profits and expenses in a provident fund account to each of the components and the deduction of payments therefrom.
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Contact Us →Section D: Payments to a Provident Fund and Withdrawal of Monies Therefrom
Payments to a provident fund§
22.
(a)The Minister, with the approval of the Finance Committee, shall prescribe maximum rates or amounts for payments by a member, and if the member is an employed member – also by the member's employer, to a provident fund; however, the total of all payments that a member shall be entitled to deposit in all of that member's accounts in all investment provident funds shall not exceed NIS 70,000 in any fiscal year; the said amount shall be updated annually on 1 January, according to the rate of increase of the index known at that time, and with respect to the date of the first update – compared to the index that was known on the 25th day of Sivan 5776 (1 July 2016).
(a1)A member shall be entitled to deposit payments in an investment provident fund until the 13th day of Tevet 5778 (31 December 2017) in excess of the ceiling prescribed in subsection (a), provided that all of the following conditions are met:
(1)prior to the date of deposit, the member sold an apartment that had been in the member's ownership before the 16th day of Kislev 5777 (16 December 2016) to an Israeli resident purchaser who has a sole apartment as defined in section 9(g1g)(4) of the Real Property Taxation (Appreciation and Purchase) Law, 5723-1963 (hereinafter – the Real Property Taxation Law) or to such a purchaser who does not have an apartment;
(2)from the 3rd day of Tevet 5777 (1 January 2017) until the date of the sale of the apartment as referred to in paragraph (1), the member was liable to tax as defined in section 115 of the Economic Efficiency Law (Legislative Amendments for Achieving Budget Targets for the Budget Years 2017 and 2018), 5777-2016, and submitted a declaration regarding residential apartments in the member's ownership pursuant to section 148 of that Law;
(3)the total of all payments deposited by the member in an investment provident fund, in excess of the ceiling prescribed in subsection (a), did not exceed NIS 2,500,000 or the total consideration received for the sale of apartments in respect of which the conditions set out in paragraph (1) are met, whichever is lower;
(4)the member presented a certificate from the Administrator, as defined in the Real Property Taxation Law, that the conditions prescribed in paragraphs (1) and (2) were met, and regarding the amount of consideration received for the sale of apartments in respect of which the conditions set out in paragraph (1) are met.
(b)The Minister may prescribe provisions with respect to the following matters:
(1)conditions that shall apply with respect to the payment of monies to a provident fund, including conditions that shall apply to payments in excess of the amounts or rates to be prescribed;
(2)the interest to be charged by a managing company from an employer, whether or not the employer is a member, in respect of a delay in depositing the payments referred to in subsection (a) in a provident fund;
(3)(Repealed)
(c)The Commissioner may give directions with respect to the following matters:
(1)the manner of depositing the payments referred to in subsection (a) in a provident fund, the particulars that an employer, whether or not the employer is a member, must provide to the managing company at the time of deposit, and the dates for depositing the payments;
(2)confirmations that a managing company is required to furnish to members of a provident fund under its management, and with respect to employed members – also to their employers, regarding the deposit of the payments in the provident fund.
(d)The Minister, with the approval of the Finance Committee, shall be entitled to amend the amount prescribed in subsection (a1)(3).
Withdrawal and transfer of monies from a provident fund§
23.
(a)The withdrawal of monies from a provident fund, including the receipt of a pension from a pension provident fund, and the transfer of monies from one provident fund to another provident fund, from one account in a provident fund to another account, and from one investment track in a multi-track provident fund to another investment track in the same fund, shall be as set out below only:
(1)withdrawal by a member, an employee of an employer-member, or a beneficiary, of monies deposited to the member's account in the provident fund; however –
(a)withdrawal by a member of a provident fund or by an employee of an employer-member of monies from a pension provident fund, by way of commuting part of the pension to a lump sum, shall be effected –
(1)with respect to a member of a provident fund that is not a veteran fund – in accordance with the commutation method prescribed in the fund's regulations, provided that the pension amount to which the member shall be entitled after the commutation shall not be less than the minimum pension amount; and if the pension amount to which the member shall be entitled after the commutation is equal to the minimum pension amount, or if the pension amount to which the member is entitled does not exceed the minimum pension amount – in accordance with the commutation method prescribed in the fund's regulations, at a rate of the pension to which the member is entitled from the fund not exceeding 25% and for a period not exceeding five years; where a budgetary pension or a pension from another fund is paid to the member, the amount of that pension or budgetary pension shall also be taken into account for the purpose of calculating the pension amount to which the member shall be entitled after the commutation;
(2)with respect to an employee of an employer-member and with respect to a member of a veteran fund – in accordance with the commutation method prescribed in the fund's regulations;
(b)withdrawal of monies by a member from a pension provident fund, in a lump sum otherwise than by way of commuting a pension, shall be effected only from the following:
(1)from the severance pay component;
(2)from a new account as referred to in paragraphs (2a) or (2b);
(3)from such a fund that is not a veteran fund, provided that all of the following conditions are met with respect to the member:
(a)the member has reached the mandatory retirement age as defined in the Retirement Age Law, 5764-2004;
(b)the total of the monies in the member's accounts in the provident fund from which the monies are being withdrawn and in other pension provident funds that are not veteran funds does not exceed the minimum accumulation amount;
(c)no pension from a pension provident fund that is not a veteran fund is being paid to the member, and if such a pension is being paid to the member – the total of the pensions being paid to the member from that fund and from other pension provident funds, plus a budgetary pension, exceeds the minimum pension amount;
(4)with respect to an employed member – from monies deposited in the fund before the 23rd day of Tevet 5760 (1 January 2000), provided that the member has reached the age of 60 or has retired from a place of employment as a result of dismissal or resignation and has not commenced working at another place of employment within six months from the date of retirement;
(5)with respect to an independent member –
(a)in a pension fund – from monies deposited in the fund before the 23rd day of Nisan 5757 (30 April 1997);
(b)in an insurance fund – from amounts deposited before the 23rd day of Tevet 5760 (1 January 2000) into a policy issued pursuant to an insurance fund before the 23rd day of Nisan 5757 (30 April 1997);
(6)where the conditions prescribed pursuant to subsection (b)(1) or (1a) are met;
(c)withdrawal of monies from a central pension provident fund, other than directly by an employee of an employer-member or by an employer-member, shall be effected only by way of transferring them to one of the following:
(1)another provident fund that is a central pension provident fund;
(2)the State, in accordance with an agreement concluded between the employer-member and the State;
(2)transfer by a member of monies deposited to the member's account in the provident fund;
(2a)transfer of monies from the severance pay component in a pension provident fund that is not a central pension provident fund, or from a personal severance pay provident fund, to a new account in a pension provident fund that is not a pension fund or a central pension provident fund, in the member's name, to which no further payments of monies shall be depositable, after tax has been withheld from the said amount in accordance with the provisions of section 164 of the Income Tax Ordinance [New Version] with respect to the part that is not exempt pursuant to section 9(7a) of that Ordinance; monies transferred to a new account as aforesaid shall not be regarded as part of the severance pay component for the purposes of this section;
(2b)transfer of monies due to a beneficiary from a pension provident fund that is not a central pension provident fund, from a savings provident fund, or from a personal severance pay provident fund, to a new account in a pension provident fund that is not a pension fund or a central pension provident fund, in the beneficiary's name, to which no further payments of monies shall be depositable;
(2c)transfer of monies due to a beneficiary from an investment provident fund, to a new account in an investment provident fund in the beneficiary's name;
(3)
(a)withdrawal by an employer of an employed member of monies that the employer deposited in a personal severance pay provident fund or in the severance pay component of a pension provident fund, subject to the provisions of section 26 of the Severance Pay Law and the provisions pursuant to section 14 of that Law that apply to the employer;
(b)a withdrawal as referred to in sub-paragraph (a) shall be effected only if the employment relationship has ended and one of the following has occurred:
(1)an employer of an employed member has furnished to the managing company of the provident fund, within four months of the date of termination of the employment relationship (in this paragraph – the notice period), a declaratory judgment confirming that the employee ceased working for the employer under circumstances that do not entitle the employee to severance pay or to part thereof, in accordance with the applicable law and agreements, and that the severance pay monies, in whole or in part, belong to the employer of the employed member or that the employer is entitled to receive them;
(2)an employer of an employed member has furnished to the managing company of the provident fund, within the notice period, evidence indicating that the employer has instituted legal proceedings to obtain a declaratory judgment regarding the employer's entitlement to the severance pay monies or part thereof, or has instituted legal proceedings to forfeit the severance pay or part thereof pursuant to sections 16 or 17 of the Severance Pay Law, and a final determination has been made in the proceedings regarding the employer's entitlement to the severance pay monies or part thereof, even after the notice period;
(3)all of the following documents have been furnished to the managing company of the provident fund within the notice period:
(a)a notice from the employer of an employed member, accompanied by evidence, that severance pay monies deposited by the employer in the provident fund on behalf of the employed member, or part thereof, are returnable to the employer by law or in accordance with an employment agreement;
(b)a notice from the member, signed by the member after the date of termination of the employment relationship, that severance pay monies or part thereof deposited on the member's behalf in the provident fund during the period of employment with the employer are returnable to the employer;
(c)if a document required for the fulfilment of a condition of the conditions in sub-paragraphs (b)(1) to (3), as the case may be, has not been furnished to the managing company of the provident fund within the notice period, and the member has withdrawn the severance pay monies, the employer shall have no claim against the managing company in respect of the payment of the monies to the member;
(d)notwithstanding the provisions of sub-paragraph (b), a withdrawal as referred to in sub-paragraph (a) shall also be permitted if an employer of an employed member has furnished to the managing company of the provident fund a declaratory judgment, as referred to in sub-paragraph (b)(1), after the notice period, provided that the employed member has not withdrawn the severance pay monies up to the date on which the employer furnished the declaratory judgment as aforesaid to the managing company;
(e)a provident fund shall permit the withdrawal of severance pay monies as referred to in this paragraph, where the conditions pursuant to this paragraph are met; nothing in the provisions of this paragraph shall derogate from the provisions of any law, collective agreement or other agreement applicable to the employment relationship between the employee and the employer.
(b)The Minister, with the approval of the Finance Committee of the Knesset, shall prescribe the dates and conditions under which –
(1)members, employees of an employer-member and beneficiaries are entitled to withdraw monies from a provident fund, and conditions for the continued deposit of monies in a provident fund after the withdrawal, provided that a member shall not be entitled to withdraw monies from the savings component of a pension provident fund otherwise than by way of a pension or by way of commuting part of the pension to a lump sum, except by reason of one of the following:
(a)a health or financial condition of the member or of the member's spouse;
(b)a health condition of the member's child;
(c)A health condition of a parent who became ill or was injured after becoming a member, and one of the following applies to the parent:
(1)a stable disability degree of at least 40% was determined for the parent pursuant to Section E of Chapter V of the National Insurance Law, and the parent was granted a supplement of half the disability degree pursuant to the provisions of regulation 15 of the Regulations for Determination of Disability Degree for Work Injury Victims;
(2)a temporary disability degree of at least 40% was determined for the parent pursuant to Section E of Chapter V of the National Insurance Law, and the parent's disability degree was increased to 100% pursuant to the provisions of regulation 18a of the Regulations for Determination of Disability Degree for Work Injury Victims;
(3)a temporary disability degree of at least 75% was determined for the parent pursuant to Section E of Chapter V of the National Insurance Law;
(4)an incapacity to earn degree of at least 75% was determined for the parent pursuant to the provisions of Chapter IX of the National Insurance Law;
(5)the parent receives a nursing care benefit pursuant to Chapter X of the National Insurance Law, and the circumstances referred to in section 224(a)(1a) or (2) of that Law apply to the parent, provided that the parent also receives a benefit pursuant to the Income Support Law, 5741-1980, or an allowance for a needy person pursuant to the Nazi Persecution Disabled Persons Law, 5717-1957, or the Disabled Persons (War against the Nazis) Law, 5714-1954;
(6)a disability degree of 75% or more was determined for the parent pursuant to one of the laws listed in sub-paragraphs (1) to (4) or (7) in the latter part of section 9(5)(a) of the Income Tax Ordinance [New Version], or pursuant to another law determined by the Minister pursuant to that section or pursuant to section 9(5)(b) of the Income Tax Ordinance [New Version];
(d)(Repealed)
(1a)Members may, notwithstanding the provisions under paragraph (1), withdraw monies from a provident fund for savings and from a veteran fund, if the total monies in their accounts in that provident fund does not exceed NIS 8,000;
(2)Members may transfer monies from one provident fund to another provident fund and from one investment track in a multi-track provident fund to another investment track in the same fund;
(3)An employer of an employee-member may withdraw monies from a personal provident fund for severance pay or from the severance pay component in a provident fund for pension.
(b1)(Repealed)
(b2)For the purpose of tax law only, the following monies shall be deemed —
(1)monies from a personal provident fund for severance pay or from the severance pay component in a provident fund for pension that is not a central provident fund for pension, from which tax was withheld as referred to in subsection (a)(2a) and which were neither withdrawn by the member nor transferred to a new account as referred to in that subsection, to be monies transferred to a new account as aforesaid, at the end of three months from the date of withholding of the tax as aforesaid;
(2)monies due to a beneficiary from a provident fund for pension that is not a central provident fund for pension, from a provident fund for compensation or from a personal provident fund for severance pay, which were neither withdrawn by the beneficiary nor transferred to a new account as referred to in subsection (a)(2b) within three months from the date of the member's death, to be monies transferred to a new account as referred to in that subsection at the end of that period.
(3)monies due to a beneficiary from a provident fund for investment that were transferred to an account in a provident fund for investment in the name of the beneficiary as referred to in subsection (a)(2c), to be monies deposited by the beneficiary in such account at the time they were deposited by the deceased member;
(4)notwithstanding the provisions of paragraph (3), amounts deposited in a provident fund for investment in respect of which the conditions set out in section 22(a1) were satisfied and to which the provisions of section 9(18b) of the Income Tax Ordinance [New Version] apply, shall be deemed to be monies deposited by the beneficiary in a new account as referred to in subsection (a)(2c) at the end of three months from the date of the member's death.
(b3)
(1)The Minister, with the approval of the Labour, Welfare and Health Committee of the Knesset, shall prescribe the dates and conditions under which a self-employed member in a state of unemployment may withdraw monies from a provident fund for pension otherwise than by way of pension or by way of the capitalisation of part of the pension as a lump sum, and from a provident fund for compensation, provided that the conditions listed in sub-paragraphs (a) or (b) below are satisfied:
(a)the self-employed member deposited payments to a provident fund for pension pursuant to the provisions of Chapter II of the Economic Efficiency Law 2017 and 2018, for at least two years out of the three tax years preceding the date of withdrawal; withdrawal of monies pursuant to this sub-paragraph shall be spread over three instalments, however in the case of withdrawal by a self-employed member who has reached retirement age — in a single instalment, all as the Minister shall prescribe as aforesaid, and in an amount not exceeding the higher of the following:
(1)three times the monthly minimum wage, as defined in the Minimum Wage Law, 5747-1987, provided that monies in such amount have not been withdrawn more than twice;
(2)the lower of the following:
(a)the amount accumulated in the savings component for a state of unemployment;
(b)the amount specified in section 9(7a)(a)(2) of the Income Tax Ordinance [New Version], multiplied by the number of years in which the member deposited payments to a provident fund for pension as a self-employed member obligated to deposit, or by the number of years in which the member deposited such payments before the date of withdrawal and commencing from the tax year following the year in which the member effected a withdrawal pursuant to this subsection as a self-employed member obligated to deposit, whichever is the lower;
(b)the self-employed member deposited payments to a provident fund for pension or to a provident fund for compensation as a self-employed member before the determining date, for at least two years out of the four tax years that preceded the determining date and in accordance with the conditions prescribed in the Economic Efficiency Law 2017 and 2018 had that law applied to the member at the times of deposit (in this sub-paragraph — the prescribed conditions); withdrawal of monies pursuant to this sub-paragraph shall be spread over three instalments, however in the case of withdrawal by a self-employed member who has reached retirement age — in a single instalment, all as the Minister shall prescribe as aforesaid, and in an amount not exceeding the lower of the following:
(1)one third of the amount accumulated in the provident fund, at the determining date;
(2)the amount specified in section 9(7a)(a)(2) of the Income Tax Ordinance [New Version], multiplied by the number of years in which the member deposited payments to a provident fund as a self-employed member obligated to deposit, before the determining date and in accordance with the prescribed conditions, or by the number of years in which the member deposited such payments before the determining date and commencing from the tax year following the year in which the member effected a withdrawal without tax liability in the provident fund, whichever is the lower;
(2)In this subsection —
"income liable to deposit" and "savings component for a state of unemployment" — as defined in section 2 of the Economic Efficiency Law 2017 and 2018;
"the determining date" means the commencement date of the Economic Efficiency Law 2017 and 2018;
"state of unemployment", in relation to a self-employed member — a state in which a self-employed member has ceased to engage in their occupation or has closed their business, or a state in which the self-employed member has reached retirement age within the meaning of the Retirement Age Law, 5764-2004, and has no income liable to deposit;
"self-employed member obligated to deposit" means a self-employed member who is subject to an obligation to deposit payments to a provident fund for pension pursuant to Chapter II of the Economic Efficiency Law 2017 and 2018.
(b4)(Expired)
(c)The Commissioner, after consulting the Committee, may issue directives regarding the manner of calculating the amounts that may be withdrawn or transferred pursuant to this section.
(d)The Commissioner may issue directives on the following matters:
(1)confirmations that a managing company is required to provide to members in a provident fund under its management, and in respect of employee-members — also to their employers, as well as to employees of an employer-member, in respect of the transfer or withdrawal of monies pursuant to this section;
(2)particulars, data and documents that managing companies are required to transfer to one another in connection with the execution of a transfer of monies between provident funds pursuant to this section, the manner of their transfer and the dates therefor.
(e)In this section —
"National Insurance Law" means the National Insurance Law [Consolidated Version], 5755-1995;
"compensation component" means the components in a provident fund for pension account of payments that are not the severance pay component;
"minimum accumulation amount" means NIS 80,000;
"minimum pension amount" means NIS 3,850;
"budgetary pension" means payments in respect of retirement, paid to a member monthly on a continuous basis, pursuant to law or agreement, from the State Treasury or from the member's employer's fund, throughout the member's lifetime;
"Regulations for Determination of Disability Degree for Work Injury Victims" means the National Insurance Regulations (Determination of Disability Degree for Work Injury Victims), 5716-1956.
(f)
(1)The amounts referred to in subsection (e) shall be updated annually, on 1 January, in accordance with the rate of increase of the index known at that date, and in respect of the first update date — compared to the index known on 1 March 2008;
(2)The amount referred to in subsection (b)(1a) shall be updated annually on 1 January, in accordance with the rate of increase of the index known at that date, and in respect of the first update date — compared to the index known on the 20th of Tevet 5776 (1 January 2016).
Locating members and beneficiaries§
24.
The Commissioner may issue directives regarding the steps and actions that a managing company is required to take in order to locate members with whom contact has been lost and in order to locate beneficiaries following the death of a member; directives pursuant to this section shall be published in Reshumot (Official Gazette).
24a.§
(Repealed)
Consolidation of accounts upon joining a pension fund§
24b.
(a)
(1)Where a member joins a pension fund (in this section — the absorbing fund), the managing company of the absorbing fund shall send the member a notice that shall include an update on the intention to transfer the information and to locate the information as referred to in paragraph (3), for the purpose of transferring the monies as referred to in paragraph (7), and on the member's right to notify the managing company of their objection to such transfer as referred to in paragraph (2) (in this section — update notice);
(2)A member who has received an update notice may notify the managing company of the absorbing fund, within 45 days from the date of dispatch of the update notice, that the member objects to the absorbing fund approaching the managing companies of the pension funds in order to locate monies registered in the member's name in the member's accounts in pension funds in which the member is a non-depositing member, or in some of them;
(3)If the member has not provided the managing company of the absorbing fund with a notice within the period referred to in paragraph (2), the managing company of the absorbing fund shall approach the other managing companies of pension funds in order to ascertain whether monies are registered in the member's name in accounts in pension funds in which the member is a non-depositing member (in this subsection — the transferring funds), and shall transfer to them for this purpose only the member's identity number and date of birth;
(4)A managing company that has received an approach as referred to in paragraph (3) shall respond to the managing company of the absorbing fund as to whether there are monies as referred to in paragraph (3); for the purposes of this paragraph, a member who was at least 60 years of age on the 22nd of Tevet 5768 (31 December 2007), in whose name monies are registered in their accounts in a pension fund as a non-depositing member, shall not be regarded as such if the accounts in which those monies are registered in their name were opened before that date;
(5)If the managing company of the absorbing fund finds that monies are registered in the member's name in accounts in pension funds in which the member is a non-depositing member, it shall send the member a notice to that effect, which shall include an update on the intention to transfer monies as referred to in paragraph (7), the names of the pension funds in which the member is a non-depositing member, and the member's right to give notice that the monies are not to be transferred as referred to in paragraph (6);
(6)A member who has received a notice as referred to in paragraph (5) may notify the managing company of the absorbing fund, within 45 days from the date of dispatch of the notice (in this subsection — the selection period), that the member requests that the monies registered in the member's name in the member's accounts in pension funds in which the member is a non-depositing member, or some of them, not be transferred to the member's account in the absorbing fund;
(7)If the member has not notified the managing company of the absorbing fund as referred to in paragraph (6) by the end of the selection period, the member shall be deemed to have submitted a request to transfer the monies referred to in that paragraph to the member's account in the pension fund which the member joined pursuant to section 23(b)(2), at the end of the selection period, and the managing company of the transferring fund shall transfer those monies accordingly;
(8)Where an absorbing fund has forwarded a request to transfer monies as referred to in paragraph (7), the managing company of the transferring fund shall reject a request it received if, in respect of that member, a payment was deposited in the transferring fund in at least one of the four months preceding the date of receipt of the request in the transferring fund; for this purpose —
(a)amounts deducted from a member's account in the pension fund solely for the purpose of payment for the continuation of insurance cover in the pension fund that the fund is required to deduct by law shall not be regarded as a deposit, unless the member has instructed the managing company of the transferring fund, in writing, to deduct amounts from the member's account for the purpose of payment for the continuation of insurance cover in the pension fund as aforesaid, or has chosen to deposit amounts in the member's account in the transferring fund for the purpose of payment for the continuation of insurance cover in the pension fund, all in respect of a period beyond the period during which the fund is required to make deductions by law as aforesaid;
(b)monies that are deemed, for the purposes of the member's rights vis-à-vis the transferring fund, as though they had been deposited on time pursuant to the provisions of the Wage Protection Law, 5718-1958, shall also be regarded as a deposit;
(9)In respect of a member who joined an absorbing fund that is a comprehensive new fund, and who is a non-depositing member in a comprehensive new fund and in a general new fund managed by another managing company, the monies registered in the member's name in the general new fund in which the member is a non-depositing member shall be transferred to the member's account in the general new fund managed by the managing company of the absorbing fund as referred to in paragraph (7), and if that member does not have an account in the general new fund managed by the managing company of the absorbing fund — the said monies shall be transferred to a new account in the general new fund managed by the managing company of the absorbing fund;
(10)In respect of a member who joined an absorbing fund that is a general new fund and who is a depositing member in a comprehensive new fund and a non-depositing member in a general new fund managed by another managing company, that other managing company shall reject a request as referred to in paragraph (7) forwarded to it by the managing company of the absorbing fund;
(11)Where an absorbing fund has received information as referred to in paragraph (4) and the member has given the absorbing fund a notice as referred to in paragraph (6), or if monies of a member were not transferred pursuant to the provisions of paragraph (8) or (10), the managing company shall delete the information it received as aforesaid within ten days from the date it received the member's notice as aforesaid or from the date the transfer request was rejected as referred to in paragraph (8) or (10), as the case may be, and shall make no use of the information;
(12)Notices pursuant to this subsection shall be given in the manner and at the time directed by the Commissioner, insofar as these have not been prescribed pursuant to this subsection.
(b)The transfer of information as referred to in this section, access thereto, the use thereof and its retention shall be solely for the purpose of implementing the provisions pursuant to this section.
(c)In this section —
"non-depositing member" means a member in a pension fund in whom both of the following apply:
(1)no payment has been deposited on the member's behalf in the pension fund in the two months preceding the date of receipt of the approach in the pension fund as referred to in subsection (a)(3); the provisions of the latter part of subsection (a)(8) shall apply in respect of the deposit;
(2)no pension or disability pension is being paid to the member from the pension fund;
"disability pension" means payments made to a member from the pension fund each and every month on a continuous basis, pursuant to the pension fund's articles, by reason of the member having lost their capacity to work, in whole or in part, including payments made to the member's account in the pension fund;
"pension fund" — excluding a veteran fund.
Prohibition on transfer, charge (security interest) or attachment of a member's rights§
25.
(a)A member's rights in a provident fund may not be transferred to another or subjected to a charge (security interest), except for a transfer or charge (security interest) as detailed below:
(1)a charge (security interest) over a member's rights in a provident fund for compensation, in a provident fund for investment, in a new account within the meaning of section 23(a)(2a) and (2b), or in a training fund, made after the date on which the member is entitled to withdraw the monies from the fund pursuant to the provisions of section 23;
(2)the transfer of monies to a creditor in the framework of the realisation of a charge (security interest) made in the creditor's favour pursuant to the provisions of paragraph (1), and the realisation of a charge (security interest) as aforesaid shall be deemed to be a withdrawal of monies by the member pursuant to the provisions of section 23;
(3)another transfer or charge (security interest) made in accordance with directives prescribed by the Minister, with the approval of the Finance Committee, subject to the provisions of any law.
(b)A member's rights in a provident fund may not be attached except pursuant to directives to be prescribed by the Minister with the consent of the Minister of Justice, with the approval of the Finance Committee, and subject to the provisions of any law; in Regulations as aforesaid the Minister may —
(1)prescribe conditions or circumstances under which it shall be possible to attach a member's rights in a provident fund;
(2)permit, generally or subject to conditions and circumstances to be prescribed, the attachment of part of a member's rights in a provident fund whose value exceeds an amount to be prescribed;
(3)prescribe dates and conditions for the crystallisation of the member's right to withdraw monies from a provident fund even before the date prescribed for that purpose pursuant to section 23, for the purpose of realising an attachment imposed pursuant to Regulations made under this section.
(c)A transfer, charge (security interest) or attachment of a member's rights made in contravention of the provisions pursuant to this section shall have no effect.
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