31 October 2014

Check your bituach menhalim and keren hishtalmut statements!

Over the last few weeks, you have received in the mail statements regarding your manager’s insurance (bituach menhalim / ביטוח מנהלים) and continuing education fund policies (keren hishtalmut / קרן השתלמות).  It’s time to take them out and review them for basic accuracy because a surprising number have errors – in the favor of the insurance companies, of course!

Why should statements be checked?
Perhaps, only by chance or the particular insurance agency selected by my employer or the insurance companies I have selected, I have found more than a dozen errors with my policies over the years.  Some of the recent errors which I have discovered are…

  • 2008 – one month missing from the continuing education fund policy of all employees in my company
  • 2009 – three missing months from the continuing education fund policy of several employees in my company, and another was missing from only mine; several continuing education fund policy deposits were credited late
  • 2010 – four manager’s insurance policy deposits were credited late

How much money was at stake?  Personally, thousands of shekels would have been lost.  For those in my company, the amount totaled in the tens of thousands of shekels.  Manager’s insurance and continuing education fund policies can account for over 28% of your salary!  Even better, it’s after-tax money.  These “benefits” are only benefits if you are actually credited the money which you should be.

Who discovered that money was missing?  Me.  Not my insurance company, not my insurance agent or his agency (unaffiliated with the insurance company), and not my employer.  The only one who will look out for your money is you.

Policy statements
Insurance companies are mandated to provide regular statements on the status of your accounts.  Any manager’s insurance or continuing education fund policy that is currently receiving deposits will be issued statements every quarter, and all policies (even if there are no deposits) will be issued an annual statement.  Each statement provides a host of important information, though some statements are easier to decipher than others.

What to check
It can take some time to understand all of the information in the statement.  But, there are a few basic checks that are fairly easy and, perhaps, the most important.

Are deposits being made?

    • If an employer is making a deduction from your salary, there must be a corresponding deposit into your relevant policy.
    • On each statement, there is a column which indicates the particular salary month for which a deposit is being made.
    • For every month you have worked at the company, there should be a deposit made.

 

 

 

Are deposits the right amount?

  • Customarily, most who receive a continuing education fund policy as a benefit from their employer will expect to see 10% of their monthly salary deposited.  (A continuing education fund contribution is generally comprised of a 2.5% contribution from the employee’s salary and a 7.5% match from the employer.)
  • A manager’s insurance policy has several components.  The main component for retirement is generally 10% of an employee’s monthly salary.  (That is usually made up of a 5% contribution from the employee’s salary and a 5% match from the employer.)  A second component is severance, which is an employer contribution of 8.33% of an employee’s salary.  There is likely also a disability insurance component, paid for by the employer, which will appear as a monthly payment as well.
  • If you have split your manager’s insurance or continuing education fund policies across more than one type of account or company, then you need to check that the total deposit amount is correct.
  • In some cases, the amount of money subject to benefits is less than your full monthly salary.  If the deposits into your policies are consistently lower than expected, this could be a reason, and you should check your contract or ask your employer.

Are the deposits on time?

  • For each deposit, there will be listed its value date and / or date of deposit.
  • The value (or deposit) date should be in the month after the salary from which it was deducted.  For example, if the deposit was made for January 2011′s salary, the value (or deposit) date should be in February 2011.

 

What should be done in case of an error?

  1. First, check with your employer that they are making the deposits on time.  At my current company, none of the problems were caused by the employer not transferring money or transferring money late.  Your employer should be willing to provide you with documentation, if necessary.
  2. If the problem wasn’t caused by the employer, then your next point of contact is your insurance agent.  That’s the guy who had you sign up at the beginning and drops off calendars once a year :)
  3. Contact your agent and share with him your concerns about what you have found.  Make sure to follow-up in writing via e-mail, so that you have started a written record.
  4. I would recommend having the insurance agent tell you when he expects the issue to be resolved (within one or two weeks at the most).  In my case, each and every time, that deadline came and passed without a peep from the insurance agent.  I wrote again and asked what the new time estimate was (again, no longer than one or two weeks at the most).  Then, invariably, the deadline would come and go, and the issue was still unresolved.  I then contacted the insurance agent and reminded him of the importance of my issue, and then gently hinted that I would hate to have to involve the Ministry of Treasury’s Insurance Supervisor.  (A complaint with the Insurance Supervisor can be filed online with just a few clicks.)  Then, like magic, the issue would be resolved within a few days.

Time to check!
As I said, I’ve found many mistakes, and saved myself thousands of shekels.  In every case, no one, who I might have thought would check for me, did.  In every single case of missing or late money which I discovered, I had to put in some time to recover the money.  In my mind, it was definitely worth it.  Now, go check your statements, and make sure your money is there!

I’d be happy to hear in the comments whether you have found any mistakes or recovered any money!

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Comments

  1. Thank you for this wonderful and informative blog.

    I have a keren hishtalmut policy with Clal. The time has come for me to be able to close the policy, and withdraw the funds. I went to their office in an attempt to do just that, and requested a check. They told me that they have no ability to write checks. The only way to give me the proceeds (NS 16,000), is to transfer the funds to my bank account. Problem is, I do not have a bank account, and I am unable to open one**. I asked Clal whether I could give my lawyer (or another person), power of attorney (or some other authorization), to accept a transfer of my right to the proceeds, but their answer was no. it must be my account. My lawyer has no further advice to give me, and I am stuck between that old rock and the hard place.

    Another thing, is that a few years ago, I borrowed money from this keren, with the obligation to pay the loan off in full, at this particular time, hen the policy is able to be closed and proceeds withdrawn. Clal has been sending me letters, demanding payment. They want their money, and so do I. Further, the employer who participated in the keren, no longer exists, so I can not seek advice from them. I just now went to the MOF website, but was unable to find anything helpful.

    I’m grateful for any advice you can provide!!

    Ben

    ** There are reasons why I am unable to open a bank account, so that option is just not possible. I tried doing so at the Bank Ha’Doar, and they told me there is something from the Bank of Israel, in their computer system, advising them that they may not open an account for me, without their issur. The reasons for this is not a topic for a public forum.

    • Ben, thank you for your kind words, and I am sorry to hear of your difficulties. Interestingly enough, I recently was issued a payment from an insurance company, and they insisted on sending me a check despite my request for a bank transfer. Perhaps you have already thought of it, but do you have a bank account abroad to which Clal would be willing to transfer the money? Good luck!

  2. Hi There,
    Interesting article. Thank you.

    I am not sure whether you can help….. hopefully you can… i started Keren Hishtalmut over 10 years ago and never withdrew the money, even though i stopped paying into the policy given i now work for a non-Israeli copmany. Somehow i seem to have misplaced all documentation from the policy and don’t even know which firm i had the policy with! (i thought it was Migdal, but they claim it is not..)

    Is there any recommendation for how i can track down my Keren Hishtalmut?

    Thanks so much
    Rob

    • Rob,

      That is a good question. As the post states, you should be issued a statement every year, regardless of whether or not you are still making deposits in the same account. Do you live at the same address? If not, can you contact someone who lives at your previous address?

      Another avenue would be to contact the insurance agency who administered your policy, if you can remember the insurance agency or insurance agent.

      Also, your employer at the time should recall the insurance agency with which you had your policy. I believe that they receive copies of your policy and have documentation of the deposits which they made on your behalf. If they can dig up those documents, are still using the same insurance agency, or can recall which insurance agency they used at the time, they should be able to point you in the right direction.

      Lastly, if all of the above fail, you could try contacting each insurance company and inquiring if you have an account there. With your name and identity number, I would assume that they could give you that information.

      If you can, let us know how it turns out. Good luck!

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