(Sept. 4, 2014) On July 28, 2014, the Knesset (Israel’s parliament) passed the Law for the Division of Retirement Savings Between Spouses Who Have Separated, 5774-2014. (Text of the Law [in Hebrew] (July 28, 2014), Knesset website [scroll down page for hyperlink to the Law].)
The stated objective of the Law is to determine arrangements for the distribution of retirement funds provided by a “paying body” to an employee or a retiree (the saver) and his/her former spouse, including a “person who is known in public as his/her spouse.” (Id. §2.) Israeli law does not recognize common law marriages; it generally provides, however, social and economic rights to cohabiting couples who share their lives together and who are publicly known as spouses.
The Law defines a “paying body” as one of the following:
1. for retirement savings in an investment fund – the company that manages the fund;
2. for retirement savings in an insurance fund – the insurer;
3. for retirement savings accumulated through a pension plan – the employer. However, if the pension under the stipulated arrangement is paid via a central pension investment fund, the paying body will be the company that manages that fund … . (Id.)
The Law provides procedures for registering the specific details included in a court decision that determines, among other matters, the division of retirement savings between the saver and his/her former spouse by the paying body, following either the dissolution of the marriage or a judgment determining the spouses’ resource balancing arrangement for the purpose of the division of their property. (Id. Ch. B.)
In addition, the Law regulates the division of retirement savings between former spouses based on a judgment ordering the accumulation of savings in a new account under the name of the former spouse (id. Ch. C) or ordering a division of the savings accrued during the lifetime of the beneficiary’s spouse (id. Ch. D).