Funds & Savings עברית

Kupat Gemel

A Kupat Gemel is an Israeli long-term provident fund used for retirement saving, offering tax benefits on deposits and withdrawals as an annuity.

A Kupat Gemel ("provident fund") is an Israeli long-term savings fund whose assets are generally locked until retirement age, when they are paid out as a monthly annuity with favourable tax treatment.[1] It is one of the three pillars of Israeli long-term savings alongside pension funds and Keren Hishtalmut.

Structure

Deposits to a Kupat Gemel enjoy a tax credit or deduction up to statutory ceilings, and investment gains accumulate tax-deferred. From retirement age, balances withdrawn as an annuity are exempt from capital-gains tax, which makes the annuity route materially more attractive than a lump-sum withdrawal.[1]

Investment tracks

Like Keren Hishtalmut, Kupat Gemel money is invested in managed tracks — money-market, bond, mixed and equity — offered by investment houses and insurance companies. Since 2016, default tracks are age-based lifecycle portfolios that reduce equity exposure as the saver approaches retirement.[2]

Regulation

Kupot Gemel are supervised by the Capital Market, Insurance and Savings Authority; fund managers are additionally licensed by the Israel Securities Authority.[2]

Sources

  1. [1] Capital Market, Insurance and Savings Authority — Israeli Government Primary source

    Cited for: Balances locked until retirement; annuity withdrawals exempt from capital-gains tax

  2. [2] Capital Market, Insurance and Savings Authority — Israeli Government Primary source

    Cited for: Since 2016 default tracks are age-based lifecycle portfolios