Israeli Court Approves Final Settlement for Collapsed Pension Fund Slice

The Tel Aviv District Court has approved the final settlement plan for the collapsed pension fund, Slice, paving the way for the distribution of tens of millions of shekels already collected and approximately 200 million shekels remaining in a transitional account. The court's decision, made by Judge Sigal Yaacobi, formalizes a plan initially agreed upon in May 2025, but the process of returning funds to affected savers is expected to be lengthy.

The settlement addresses significant issues, including the handling of loans taken by some members of the "red funds" and ongoing delays in releasing funds from the "white funds." The Slice affair came to light in late 2023 when the Capital Markets Authority discovered severe mismanagement of member funds and appointed Efi Sandrov as the authorized trustee. At its peak, Slice managed about 4.2 billion shekels, with 2.4 billion in personal retirement accounts (IRA).

The core of the scandal involves "red funds," private investment funds where thousands of savers' money was placed despite not meeting the criteria for such investments. Some savers joined Slice after being offered loans against their savings. The trustee found it difficult to locate, assign, and liquidate many assets within these funds, complicating the return of money.

Approximately 7,500 members are affected, having transferred about 1 billion shekels in total. The updated plan postpones a decision on whether savers who received loans will have to repay them until the total recovered funds and the remaining deficit are clear. The trustee noted that collecting small sums from thousands of individuals might be impractical.

Funds in the transitional account, where saver money was held before being transferred to the red funds, will be distributed based on a September 2023 cutoff. Those whose funds were deposited after this date and not invested will receive 100% of their amount plus interest. Earlier deposits will be subject to a distribution mechanism accounting for the shortfall.

The situation for "white fund" members is also more complex than initially assessed. While an earlier estimate suggested these funds could be released by June 2025, about 1,800 members with investments worth 1.8 billion shekels remain. Over 700 of them hold investments in "limited white funds" that are currently illiquid or untransferable due to financial or legal restrictions. For the funds that can be released, priority is given to members aged 60 and over, then 50 and over, and finally 40 and over.

Efforts to recover funds from those who raised money continue. Several repayment agreements have been signed, including one with Liyam Israel for about 90 million shekels and another with Udi Avital for $2.3 million, though actual returns have been minimal. Other entities, like Finbert Insurance Agency ($63 million) and Guy Schnitzer ($100 million), have yet to sign repayment agreements.