Pensions
A pension is money allocated by both the employee and the employer, in order to be used by the employee following his retirement from the work force, namely in his old age. This does not include the "Elderly Allocation" (קצבת זקנה), which is determined and paid by the National Insurance Institute.
Despite the fact that the term "pension" is an inherent part of retirement age, by the time one reaches retirement age, the pension rights have already been determined and in fact, cannot be changed. All that is left is to ascertain that the pensioner receives his full rights from the pension fund to which he has deposited funds over the years.
It must also be remembered that a "pension event" does not occur only upon retirement. Events of disability, death or dismissal can also constitute "pension events", before retirement age. A pension usually includes rights to a stipend in the event of disability or death, in which cases, the surviving dependents (the widow/er, children under 21) are entitled to the pension.
Up until now, pensions belonged only to salaried employees, with an allocation for pension being an integral part of the employment terms. Today, in Israel there is mandatory pension allocation for all the employees in the economy, in addition to legislation which would make it mandatory for self-employed people (עצמאים) to save funds for their own pensions.
Under current legislation, each employee is entitled to choose the pension fund to which the funds will be allocated. It is also important to note that the type of pension allocation can be altered, according to changes in the employee's life (such as children becoming adult), which require the pension plan to be adapted accordingly.