How to Choose a Pension Fund

Choosing a pension fund is not a form to be filled in — it is the decision that determines how much money you will have every month after age 67. Most employees receive a default fund from their employer and never examine it again. This guide provides a structured decision framework.

The law is on your side: choosing and switching are the right of every employee, at any time, at no cost.

The five criteria, in order of importance

1. Management fees

Their impact is certain and they are entirely within your control. Fees are charged both on accumulated savings and on each contribution. The ceiling in a comprehensive fund is 0.5% of accumulation plus 6% of contributions, but in practice far lower rates are achievable through negotiation.

2. Returns over time

Look at a five to ten year average in the track relevant to your age, and at consistency across that period rather than a single strong year. Past returns are not a guarantee of future performance.

3. The investment track

An age-adjusted track, known as the Chilean model, is a reasonable default. A younger saver may wish to consider an equity-weighted track given the longer horizon.

4. Insurance cover

A pension fund includes disability and survivors' cover, the cost of which is deducted from your contributions. This is real value, and it is worth understanding what you are buying.

5. Stability of the managing institution and service quality

Fund size, the financial strength of the manager, the quality of the digital interface, and response times.

Default funds — who they suit

Since 1 June 2025, an employee who has not chosen a fund is automatically assigned to one of four default funds — Infinity, Altshuler Shaham, Mor and Meitav — according to the check digit of their ID number. The management fees are guaranteed at up to 0.22% of accumulation and 1% of contributions, for ten years. This suits most savers who would rather not negotiate.

How to compare the major funds properly

The numbers are updated continually, so the useful skill is knowing where to check rather than memorising figures. Actual management fees and returns are published in the Pensia Net system. Your own fees appear in your annual report or personal account area. Every product held in your name is listed in Har HaKesef and in the pension clearing house (Maslaka Pensionit).

Pension funds for the self-employed

Contributions have been compulsory since 2017, and come with a double tax benefit through both a deduction and a credit. A self-employed person has no employer negotiating on their behalf, so the negotiation falls to them. It can be combined with a study fund for the self-employed.

How to switch funds, step by step

First, check what you currently hold, through Har HaKesef or your annual report. Second, compare alternatives on Pensia Net. Third, negotiate on management fees, using a competing offer as leverage. Fourth, submit a transfer request — the receiving fund executes the move. Fifth, confirm continuity of insurance cover, which is the critical point in the whole process.

The switch costs nothing and does not reset your seniority.