State pensions office flagged for manual paperwork, service and tax failures

Israel’s State Comptroller says the state still lacks a computerized system for managing civil servants’ retirement, even though in 2026 pension funds themselves already use digital signing. The criticism targets the Pensions Administration in the Finance Ministry, which in 2024 paid about NIS 15 billion in pensions to 120,000 retired state employees and employed 69 workers, including 21 student employees.

According to the report, the retirement process is still handled manually, with printed documents scanned into systems and, because there is no online infrastructure, papers physically transferred between the agencies involved. The comptroller said no digital retirement platform had yet been started by the end of the audit, even though the administration’s 2025-6 work plan mentions the issue without goals or deadlines.

The report also found serious problems in customer service at the public inquiries center, which receives about 130,000 calls a year. Although the service charter sets a response target of 120 seconds, the administration measures delays only after 180 seconds, a gap of 50%, and the number of abandoned calls has risen over the years.

Other findings include insufficient data sharing with the National Insurance Institute to determine retirees’ additional income and taxable income, failure to withhold the maximum tax from retirees who did not submit Form 101, and benefits paid in error to 50 widows and widowers who remarried and 7 orphans older than 21. The comptroller also said the administration failed to report on fixing earlier audit findings.