During the past two years, as the opinion of gedolei Yisroel in Israel regarding the need to hold a kosher pension fund has come to light, all of the pension companies in Israel have set up kosher pension funds under halachic supervision. Many employees have joined these tracks, which have brought high yields compared to regular tracks.
Major organizations that have taken part in this transformation include Modi’in Illit municipal workers, Merkaz Beis Yaakov in Jerusalem headed by HaRav Yeshayohu Lieberman, Matrix workers in Modi’in Illit, Karlin Institutions and large kashrus organizations, in addition to hundreds of workers in education and a range of other sectors.
Since the Mandatory Pension Law took effect, employees in the public and private sectors, including thousands of observant education workers and investment partners in financial firms, have become investors in financial organizations. Cumulative personal funds are invested by financial companies in various channels, such as interest bonds without any heter isko, share holdings and partnerships in enterprises that involve Shabbos desecration, chometz on Pesach or other prohibitions. The various problems led to a clear need to enable the observant public to put its pension monies in plans that are free of serious Torah prohibitions.
Prior to the reform in the savings market and the formation of new pension funds, pension money was set aside for employees as a set percentage unaffected by the financial results of the funds themselves, but since the reform, pensions are now tied to market fluctuations.