The National Insurance Institute reserves could dry up by as soon as 2042, when the fund would start functioning from a deficit, according to a comprehensive report covering the next 50 years and released on Thursday. According to the survey, national insurance payouts to the public may soon outpace pay-ins, so much so that by 2024 the reserve funds, managed by the Bank of Israel, will begin to dwindle. In this scenario, the National Insurance Institute would only be able to compensate a specific percentage of the public. Every working Israeli citizen is required to pay national insurance. The report encouraged the institute to begin taking measures immediately to stem the projected cash flow deficit, steps including raising the premium rate and retirement age. "If these steps are not taken, we are going to have to make a uniform 10 percent cut to all stipends," the survey said. Welfare and Social Services Minister Meir Cohen (Yesh Atid) said the National Insurance Institute recommended adopting the report. "The conclusions here reinforce my opinion, that we must adopt the institution's financial vitality report -- a report which will ensure Israel's social stability, and the capability to pay pensions over time," he said. National Insurance Institute Director-General Shlomo Mor said even small steps could improve the dire forecast. "The report is a warning to Israel. If we take small or moderate measures today to meliorate the current situation, we can avoid taking drastic measures in the future, which could damage recipients' quality of living," said Mor.
Report: National Insurance Institute reserves to dry up by 2042
Report by National Insurance Institute finds that in 29 years, the institute's till will be empty • Report encourages measures like raising premium rates, retirement age to mitigate the oncoming deficit • Welfare minister recommends adopting the report.
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