The National Insurance Bill (Amendment – Default Deposits for Long-Term Savings for a Child), 5721-2021 by MKs Yinon Azulai and Moshe Arbel passed a preliminary reading without opponents. For every child within the framework of the banks included – but only within the framework of provident funds.
In addition, it includes a change in the default mechanism so that if the parents do not choose the investment route of the savings within six months, they will be directed to an investment route with increased risk in an investment provident fund until the child turns 15, in contrast to the current default. At low risk.
“This preference is based on past experience, according to which over a 15-year period, the default deposit is more likely to yield a higher return than another deposit. This will help reduce inequality in children’s opportunities, based on research recommendations from the institution. To Social Security, “the bill states.
Under the proposal, when the child reaches the age of 15, ie 3 years before the date on which the funds become liquid, if the parents have not yet actively selected a route for him, the funds will be transferred by default to a route with little risk, in order to reduce the risk of sharp losses. Leaving time to repair losses.
The banks, which were very active during the savings legislation procedure for each child, meanwhile are watching from the sidelines and seeing how they are being taken out of the field. The proposal passed in the Ministerial Committee for Legislation earlier this week, and has now taken another step, and passed a preliminary reading. Although this is a proposal put forward by opposition members MK Yinon Azulai and Moshe Arbel, it receives broad support, and is expected to continue the legislative process along with a similar government bill.
The Minister of Welfare and Social Security, MK Meir Cohen, said that the government supports the bill, subject to its attachment to a government bill that will be submitted on the subject, adding: “This is a very worthy proposal, since due to relatively low economic literacy, A conscious investment path, which means that their children’s savings accumulate less money over the years, according to all studies. I intend to bring together with the Minister of Finance a government bill on the subject, and professional teams are already working on it. The government bill will also address the issues in the private member’s bill, as well as other issues. “
However, it will be interesting to examine whether the government bill will only address the amendment of the default route, or whether it will also seek to abolish at all the ability to deposit savings in banks. MK Yinon Azulai noted that: “We believe that when the law is passed, it is a statement that everyone will be equal and when this generation grows up they will be able to enjoy more money. It is true that this is an increased risk – but the data show that it is the best savings. I thank the Minister of Welfare and the Director General of the National Insurance Institute for their support, and the continuation of the legislation will be in agreement. “