Israeli Pension System

Israeli pension system overview

The Israeli pension system combines a public National Insurance old-age pension with mandatory funded pension saving through work. An income supplement can support low-income old-age pension recipients.

For international comparison, Israel is useful because retirement income is split between a public old-age benefit, employment-linked funded saving and a targeted means-tested supplement.

National Insurance old-age pension

The National Insurance Institute describes old-age insurance as a monthly income in old age. Pension can be paid from retirement age subject to income tests, or from the age of entitlement regardless of income. National Insurance guidance lists retirement age separately from age 70, the age of entitlement without means testing.

Editorial raster image of Jerusalem civic stone architecture for the Israeli pension system — The Israeli pension system combines National Insurance old-age pension, mandatory pension saving and targeted income supplement.

Income supplement

The income supplement to an old-age pension is the social assistance layer in this profile. National Insurance describes it as support for old-age pension recipients with low income, intended to ensure minimal subsistence income.

The supplement is income tested and may consider pension income, work income, retirement pension income, capital and property. It is separate from work-linked funded pension saving.

Mandatory pension saving

Mandatory pension saving is a major employment-linked pillar in Israel. It operates outside the National Insurance old-age pension and depends on contributions to pension funds, provident funds or insurance arrangements.

What readers should check next

Readers should check National Insurance insured status, retirement age, income supplement conditions, funded pension statements and the effect of travel or residence abroad on public benefits.

Public pillars

National Insurance old-age pension

Public old-age pension for insured residents, with rules based on retirement age, entitlement age and income tests.

Income supplement

A low-income supplement for eligible old-age pension recipients.

Private and occupational pillars

Mandatory pension saving

Work-linked funded pension saving through pension funds, provident funds or insurance arrangements.

Voluntary saving

Additional personal saving can supplement public and mandatory pension income.

Benefit basis

Contributory vs social assistance pensions

Contributory / work-linked

Old-age pension and mandatory pension saving

Basis: National Insurance old-age pension for insured residents, alongside work-linked funded pension saving through employment arrangements.
Eligibility: National Insurance old-age pension can be paid from retirement age subject to income tests, or from the age of entitlement regardless of income.
Funding: National Insurance contributions and public financing, plus employer and employee contributions to funded pension arrangements.
Note: The public pension and mandatory pension saving are distinct but both shape retirement income.

Social assistance / means-tested

Income supplement to an old-age pension

Basis: Income-tested supplement for old-age pension recipients with low income to secure minimal subsistence income.
Eligibility: Requires old-age pension receipt and satisfaction of income, asset and other National Insurance conditions.
Funding: Public National Insurance financing outside the person's funded retirement account.
Note: The supplement is a targeted low-income layer and should not be counted as work-linked pension saving.

Profile details

Eligibility: National Insurance old-age pension eligibility depends on insured status, age and income-test rules before the age of entitlement. Income supplement depends on old-age pension receipt and low income. Funded pensions depend on employment and saving records.
Retirement age: National Insurance guidance lists retirement age as 67 for men and a rising range for women depending on date of birth, while age 70 is the age of entitlement without income testing.
Contributions: National Insurance contributions finance public benefits, while mandatory pension saving is funded through employer and employee contributions to retirement arrangements.
Benefits: Old-age pension amounts can include increments and are affected by age and insurance rules. Income supplement depends on income, assets and household circumstances.

Tax and portability

Tax treatment: Pension and retirement saving tax treatment depends on Israeli tax rules, benefit type, age and withdrawal form.
Portability: Staying abroad can affect National Insurance payments and income supplement conditions. Funded pensions follow plan and tax rules.

Sources

Old Age National Insurance Institute government source - btl.gov.il
Income supplement to an old age pension National Insurance Institute government source - btl.gov.il
Conditions of entitlement - Income supplement National Insurance Institute government source - btl.gov.il
Retirement age National Insurance Institute government source - btl.gov.il
Old-age pension rates National Insurance Institute government source - btl.gov.il