>
Keren Pensia vs Bituach Menahalim: How They Differ and Who Can Choose
The form lists both products. Who may actually pay into the second one depends on salary.
Rachel started at a Jerusalem tech company on a Sunday, on a salary below NIS 27,538 a month. By Tuesday, HR had sent her a Hebrew form with two boxes she could not tell apart, keren pensia and bituach menahalim, and a line saying that if she did not choose, she would be placed in a default fund.
She wants three things: money taken from every payslip that grows into a decent pension, cover if illness stops her from working, and no fees she never agreed to.
The two products differ in who carries the insurance risk, what the law lets them charge and, under the current rules, who is allowed to put new salary money into the second one. Knowing those three things turns the form into a short decision.
Contents
- Keren Pensia and Bituach Menahalim in Plain English
- Who Can Still Put New Money into Bituach Menahalim
- Management Fees: The Legal Caps Side by Side
- Annuity Factors and Insurance Cover
- Before You Fill In the Form: What New Olim Should Know
- Frequently Asked Questions
Keren Pensia and Bituach Menahalim in Plain English
A keren pensia, or comprehensive pension fund, combines savings for an old-age pension with survivors’ insurance and disability cover (ovdan kosher avoda). Its members share the risk: if the money collected for insurance falls short of the pensions the fund owes, every pension is trimmed a little, and if there is a surplus, it is shared out among the members.
A pension fund also carries a state guarantee: the state guarantees a return of 5.15% a year, linked to the consumer price index, on 30% of the fund’s assets. Until October 2022 the guarantee came through designated government bonds paying 4.86%, which is why some older guides still describe bonds, as Globes reported when the change was made.
Bituach menahalim, usually translated as managers’ insurance or executive insurance, is an insurance policy: a contract between you and an insurance company. It combines pension savings with life cover, you can add disability cover, and you choose how much of each cover to buy.
The insurer, not the other members, carries the insurance risk. Despite the name, it is not only for managers: what limits it today is salary.
Who Can Still Put New Money into Bituach Menahalim
Under the current rules, a salaried employee can pay into bituach menahalim only on the part of the monthly salary above NIS 27,538, which is twice the national average wage in 2026, and only after NIS 5,645.29 went into a pension fund for them that same month. That NIS 5,645.29 is 20.5% of NIS 27,538, and it is also the most a comprehensive pension fund accepts in a month. Deposits above it go to another fund, such as a complementary pension fund (keren pensia mashlima) or managers’ insurance.
So for anyone earning less than NIS 27,538 a month, the real question for new deposits is which keren pensia, not which product. Bituach menahalim stays relevant for the part of a high salary above that line, and for savings already held in older policies. Within those limits the choice is yours: you pick the fund and the company, and an employer may not force a particular one.
Management Fees: The Legal Caps Side by Side
Every product charges two fees, one taken from each monthly deposit and one taken from the total you have saved. The legal maximums:
| Product | From deposits | From accumulated savings |
|---|---|---|
| Comprehensive pension fund (keren pensia) | up to 6% | up to 0.5% |
| Managers’ insurance and provident funds (kupot gemel) | up to 4% | up to 1.05% |
| Default pension funds | up to 1% | up to 0.22% |
The default funds are chosen in a Ministry of Finance tender, and their fees are guaranteed for 10 years from the day you join. When any fund gives you a discount on fees, it has to last at least 5 years.
Your annual statement shows the two percentages you actually pay, so it is the place to compare an offer against what you have now.
Annuity Factors and Insurance Cover
At retirement, your savings are turned into a monthly pension using an annuity factor (mekadem hamara). A guaranteed factor, one that does not change even when life expectancy rises, exists only in managers’ policies made before 2013, and someone who held such a policy in 2012 keeps the factor only if they continue in the same policy without a break. Pension funds and later policies have no guaranteed factor. The fee caps above also apply only from 2013, so anyone holding an older policy is weighing a guaranteed factor against fees that may be higher.
On insurance cover, the two products are built differently. In a pension fund, the survivors’ and disability cover is shared among the members and paid under the fund’s own rules (takanon), and the Ministry of Finance’s pension guide notes that this mutual model lowers the cost of the death and disability cover.
In managers’ insurance, the life cover pays the beneficiaries you named in the policy, and the employer’s share must buy disability cover securing 75% of your salary. If that costs more than the employer’s 6.5%, the employer adds the difference, up to 7.5% of salary in total. The same cover can also be bought on its own as disability income insurance.
Before You Fill In the Form: What New Olim Should Know
Pension saving has been mandatory for employees since 2008, from age 21 for men and age 20 for women. The minimum is 18.5% of salary: 6% from the employee, 6.5% from the employer towards the pension and 6% from the employer towards severance. The deposits are calculated on your base salary or the national average wage, whichever is lower, unless your contract says otherwise. Your payslip may also show deposits to a keren hishtalmut, a separate savings fund that is not part of your pension, and the full list of what employers provide is on our page on social benefits.
An employee who had no pension insurance before starting the job is entitled to employer deposits only after 6 months, unless a collective agreement, an extension order or a personal contract says otherwise. Someone who already had pension insurance before the job is covered from the first day, and the money is paid in after 3 months, retroactively.
If you do not tell your employer where to deposit, they must place you in one of the default funds, and since June 2025 an employer with 50 employees or more assigns the fund by your teudat zehut number. Joining a default fund involves no medical questionnaire and no underwriting, so it also accepts people another fund turned down for health reasons.
What to check on the form, whichever box you tick:
- The product type and the company that will manage it
- Both management fees, and for how long any discount is promised
- The investment track your money goes into
- The insurance cover included and who the beneficiaries are
- Whether severance is paid at 6% or the full 8.33%
- Which salary the deposits are calculated on
For Rachel, the second box is closed to her salary, so the form comes down to which fund, at what fees and in which investment track. Above NIS 27,538 a month, and for savings already in an older policy, the differences between the two products still apply. Goldfus is a licensed insurance and pension agency, and its team can go over these rules with you in English through the contact page.
Frequently Asked Questions
Is my Bituach Leumi old-age pension the same as my keren pensia?
No. The Bituach Leumi old-age pension is a separate state benefit, paid from retirement age: 67 for men and between 62 and 65 for women, depending on the year of birth. Someone who first immigrated after that age may be entitled only to a special old-age benefit, while a keren pensia or policy pays under its own rules, sometimes even before retirement age.
I am self-employed. Can I save through bituach menahalim?
Only after paying at least NIS 67,743.48 into a pension fund in the same year. Pension saving itself is mandatory for the self-employed from age 21 to 60, once you have been registered as self-employed (an osek) for at least 6 months: 4.45% on the part of your annual income up to NIS 82,614, and 12.55% on the part from there up to NIS 165,228, as of 2026.
Can I leave a default fund later?
Yes. An employee placed in a default fund can move to another pension fund, a provident fund or managers’ insurance, within the salary rules for managers’ insurance described above.
How do I find pension savings from an earlier job in Israel?
Start with the Ministry of Finance’s Har HaKesef site, which shows whether and where you have savings in a pension fund, managers’ insurance, provident fund or keren hishtalmut. For the details of each account, the pension clearing house (the Mislaka), operated by Swiftness under Ministry of Finance supervision, collects information from all the pension and insurance bodies into one up-to-date picture.
What should I check before moving an old managers’ policy?
Ask whether it was made before 2013 and carries a guaranteed annuity factor, because you keep that factor only if you stay in the same policy without a break. Then compare its fees with today’s caps, which do not apply to policies opened before 2013.
