Pension Deposit Claim — Missing Contributions in Ramat Gan

Missing Pension Contributions — A Substantial Legal Issue

Missing pension contributions represent a significant legal and economic issue affecting hundreds of employees in Israel. This problem arises when an employer fails to deposit their statutory contribution to an employee's pension fund, or when certain deposits are not properly recorded in the National Insurance system and pension funds. In recent times, with improved data management and increased attention to the accuracy of pension records, numerous deficiencies in contributions that existed for years have been identified.

When pension contributions are not deposited properly, the consequences for the employee can be severe: reduced retirement pension, loss of compound interest on missing contributions, gaps in continuous insurance periods, and cancellation or reduction of ancillary rights such as work disability insurance. Our firm, Mandelbaum, Gor, Weitzman-Gor and Partners, Attorneys at Law in Ramat Gan, specializes in representing employees and tax officials in legal claims for recovery of missing contributions and restoration of pension rights.

What Are Missing Pension Contributions?

Missing pension contributions refer to amounts that an employer was required to deposit into an employee's pension fund but failed to deposit on time or did not deposit at all. Under Israeli labor law, every employer is obligated to deposit monthly a specified percentage of an employee's gross salary to an approved pension fund (typically 6% of gross salary, in accordance with collective bargaining agreements or employer-employee agreements). When this deposit is not made, the employee loses not only the sum itself, but also the interest that would have accrued on that amount over the years, and the sum cannot be invested in the pension fund in the future.

There are several types of missing contributions:

• Contributions never made: The employer never deposited to the pension fund even once, despite employing the worker for years.
• Partial contributions: The employer deposited a lower sum than owed, or deposited only in certain months.
• Contributions recorded in error: Deposits were made but not properly recorded in the pension fund or the National Insurance system, affecting the calculation of future pension payments.
• Contributions not properly updated: Sums that were deposited but not updated in accordance with cost of living or wage index as required by law.

Who May Be Missing Pension Contributions?

Any employee who worked in Israel may be at risk of missing pension contributions. Certain groups face higher risk, including employees of small companies not properly supervised, workers employed by companies that went bankrupt, employees who changed employers and did not properly document work periods, and tax officials employed by companies that have not yet updated their administrative systems to comply with legal requirements. Additionally, workers employed abroad who returned to Israel may encounter pension contribution issues due to errors in translating international rights.

Pension Claim — Stages of the Legal Process

A legal lawsuit for the recovery of missing pension contributions is a complex process that requires in-depth legal knowledge and experience in dealing with pension and insurance entities. The process begins with a thorough examination of pension records, continues with a legal claim against the employer or pension fund, and concludes with obtaining a court judgment or settlement agreement that compels the return of missing contributions.

Stage 1: Investigation and Claim Formulation

In the first stage, we conduct a thorough examination of all your pension and employment records. We request a complete statement from the pension fund of all contributions registered in your name, and simultaneously we examine your work files and records relating to employment periods. This examination is essential to accurately identify the missing amounts and the periods in which contributions were not made. Following the investigation, we formulate a detailed legal claim describing the missing contributions, the financial damage caused to you, and the claim for compensation including interest.

Stage 2: Legal Proceedings and Court Representation

After filing the claim, we represent you in all court hearings. In this process, we place the burden of proof on the defendant (the employer or pension fund) to present evidence of contributions made. We present evidence such as payroll slips, bank statements, and other work documentation proving employment periods and the missing amounts. During this period, we may also negotiate with the defendant to reach an out-of-court settlement, which may save time and money.

Stage 3: Obtaining a Court Judgment or Settlement

Upon conclusion of the proceedings, the court issues a judgment requiring the defendant to return the missing contributions plus interest and compound interest. In many cases, we succeed in achieving a settlement before reaching a judgment, allowing you to receive the funds promptly and with minimal legal expenses. After obtaining the judgment or settlement, we handle the execution of the judgment to ensure you receive all sums due to you.

Calculating Damages in a Pension Claim

Calculating damages in a pension claim is not as simple as calculating a missing amount alone. The damage includes the basic amount of missing contributions, interest on the amount from the day it should have been deposited, compound interest on the interest, investment loss (namely the profits the amount would have accumulated had it been invested in the pension fund), and implications for future annuity. In these calculations, we use advanced actuarial methods and updated interest rates to ensure that the claim reflects the full damage caused to you.

Typical Compensation Ranges in Missing Pension Deposit Claims

The amounts you are entitled to in a claim for missing pension deposits depend on multiple factors, including the length of the employment period, your salary amount, the number of missing deposits, and the time period during which amounts were not deposited. Below is a table presenting typical compensation ranges in such claims (the data is based on general legal experience and does not constitute a guarantee or representation):

Important Note: The above table presents general ranges only and does not constitute a guarantee or representation of any specific amount. Each case is examined individually, and actual compensation depends on the specific circumstances of the case, the evidence presented, the court's position, and any legal settlements reached. These amounts reflect compensation for the missing deposits, interest, compound interest, and implications for future annuity in accordance with the circumstances.

Factors Affecting the Compensation Amount

The compensation amount in a pension claim depends on many complex factors. First, the length of the employment period directly influences the amount—the longer the employment period, the greater the amount of missing deposits. Second, the salary amount is a significant factor, as pension deposits are calculated as a percentage of gross salary. Third, the time elapsed from when the amount should have been deposited until the date the claim was filed affects the interest calculation. Fourth, the interest rate applied to the missing deposits significantly impacts the final compensation amount. Fifth, if the missing deposits affect your future retirement annuity, the damage could be substantially greater than the amount of missing deposits alone.

Employee Rights in Claims for Missing Pension Contributions

As an employee in Israel, you have strong legal rights regarding pension contributions. According to the Pension Law in force in Israel and the National Insurance Laws, every employer is required to deposit each month a certain percentage of the employee's gross salary into an approved pension fund. This deposit is a legal obligation, not a right that can be ignored. When an employer fails to fulfill this obligation, he breaches a clear legal principle, and you are entitled to full compensation.

Your rights as an employee include:

• Right to Full Contributions: The right to receive all contributions due to you according to the law, without deductions or reductions.
• Right to Interest: The right to receive interest on missing contributions from the day the amount should have been deposited, at the rate set by law or court rulings.
• Right to Compound Interest: In some cases, you are also entitled to compound interest on the accrued interest.
• Right to Compensation for Investment Loss: If the amounts had been invested in the pension fund, they would have accumulated profits. You are entitled to compensation for these profits you lost.
• Right to Compensation for Impact on Future Annuity: If the missing contributions affect your future annuity, you are entitled to compensation for this loss.
• Right to Legal Representation: The right to be represented by an attorney in your claim, and the right to free legal advice at the initial stage.

Legal Protection of Employee Rights

The legal system in Israel protects employee rights regarding pension contributions. The Labor Court is the competent body to adjudicate claims by employees against employers regarding missing contributions. Additionally, the National Insurance and pension funds are required to maintain accurate records of all contributions and provide the employee with a full statement of all contributions registered in his name. If there is a discrepancy or error in the records, you have the right to sue the pension fund or the National Insurance to correct the records and recover the missing contributions.

It is important to note that these rights do not expire with time. Even if years have passed since the amount should have been deposited, you are still entitled to file a claim. However, it is important to act quickly to preserve evidence and accuracy in calculations.