National Insurance Institute
National Insurance InstituteFlash 90

National Insurance Institute (NII) Director General Prof. Shlomo Mor-Yosef submitted this week the institute's actuarial report to the Minister of Labor, Welfare, and Social Services MK Haim Katz. NII is Israel's social security administration.

The report presents a comprehensive picture of the current financial situation and the expected forecast of total National Insurance disbursals compared to payments received for the near and distant future.

The report is based on current Israeli population data, population forecasts, taking into account data from various sectors in coming decades, according to Central Bureau of Statistics projections.

The report's conclusions indicate expected problems in NII's financial situation. By 2026 National Insurance benefits paid to the public are expected to exceed payments received, forcing reserve fund utilization for financing further payments. In 2045, the report extrapolates, the reserve fund will be completely drained and National Insurance will not be able to pay all its legal obligations.

The main conclusion of the report is that austerity measures must be effected immediately in order to address NII's predicted problematic financial situation. Measures might include increasing premium rates, raising the retirement age, and other options.

The report notes the importance of accompanying any change to the National Insurance Law by the Israeli Knesset with an actuarial examination of the change's impact on NII's financial stability and the ability to fund and pay pensions in the long term.

Minister of Labor, Welfare, and Social Services MK Haim Katz said after the report was submitted, "National Insurance is one of the fundamental pillars upon which Israeli social policy rests. It is our duty to ensure that the NII continues to serve the citizens of Israel in the future. The conclusions of the report require the Israeli government to work towards improving the actuarial situation of the NII to ensure the ability to pay pensions over time to Israeli citizens including the elderly, the disabled, and the disadvantaged."

NII Director General Prof. Shlomo Mor-Yosef noted, "In recent years we have taken various measures to deal with the challenges of an aging population and the NII's actuarial means, following the previous actuarial report. These measures have helped defer an actuarial deficit for several years, but a warning sign to Israel still stands. I call on the government to raise the issue, and proceed to implement austerity measures today in order to improve the situation, this in order to avoid drastic measures in the future that may harm the level of benefits to policyholders."