According to Israeli law, employers must pay a pension to their employees on a monthly basis.
When it comes to foreign employees, the employer has the choice of setting up a pension fund in Israel for the employee or depositing the money into a specially designated fund created by the Population Authority of the Ministry of Interior. In turn, the money is given to employees when they leave the country.
An audit of the Population and Immigration Authority found that the registration until 2020 was inadequate and that the Population Authority did not properly supervise the deposit. The report states that discrepancies of millions of New Israeli Shekels were found in the records of deposits for foreign workers and asylum seekers.
According to the auditor “These are hundreds of millions of shekels that are deposited and withdrawn every year so that the Authority cannot afford poor, non-rigorous and unstable management of the data,”
CPA Gur-Arieh Alkalai wrote in a report published by the Population and Immigration Authority in February of this year, which reviewed the years 2017-2020. The Population and Immigration Authority told Haaretz that the deficiencies in the report have been corrected.
Israeli law states that employers of foreign workers are required to set aside for their employees an amount per deposit, which is based on the components of compensation and pension benefits. The procedure has two objectives: ensuring the rights of foreigners and creating an incentive to leave Israel and preventing them from settling in the country.
If foreign worker remains in Israel after their work visas have expired, the state can deduct part or all of the funds from the deposit – and under certain conditions, all of it.
One of the most serious findings in the report, is a discrepancy between the Authority’s data and the data of Bank Mizrahi, in which deposits are deposited between 2017 and 2019. The gaps are estimated at millions of shekels in deposit records in all industries – nursing, agriculture, construction, and asylum seekers.
From the data, the internal auditor concluded that there is no orderly reconciliation between the authority’s officials and the bank, nor between the authority’s own entities. This is despite the claims of the authority’s deposits department that such adjustments are made on an ongoing basis. The Population and Immigration Authority’s explanations for the discrepancies were rejected by the audit, which stated that the explanations indicated that adjustments between the Population and Immigration Authority officials and the bank were not made—at least not as often as required.
