Israeli Economic Council Proposes Pension Contribution Suspension for Under-40s

Israel's National Economic Council, operating under the Prime Minister's Office, has proposed eliminating the mandatory employee pension contribution for workers under the age of 40. The council stated that under this proposal, employees would remain insured, but their share of the pension contribution would not be deducted from their salary until they reach 40. Employer contributions, however, would continue in full. From age 40 onwards, the current standard requirement for both employee and employer contributions would apply.

The proposal aims to increase the disposable income of younger workers, potentially boosting consumption and economic activity. The council believes this measure could provide immediate financial relief to individuals in their 20s and 30s, who often face significant expenses related to housing, education, and starting families. By deferring employee contributions, the government hopes to stimulate economic growth and improve the financial well-being of this demographic.