Non-Paying Provident Fund

In January 2008, the division between pension – a channel that provides stipend payments – and the capital investment channel – which provides a one-time payment – changed. The change in the law only applies for money that was deposited into a provident fund from January 2008 onward.

For deposits that were conducted from 1.1.2008 onward, the client will receive tax promotional at a rate of 35% in all provident funds, whether they pay stipends or not. If the stipend is taxed directly – the yields will also be taxed. If the stipend is paid with no tax liability or if it is withdrawn as stipend discounting (a one-time sum) without tax – the yields will not be taxed.

The 3rd Amendment to the Financial Services Oversight law (i.e., oversight over provident funds) abolished the division between the capital channel and the stipend channel. Since the amendment came into law, funds deposited into a provident fund will be paid via stipends. The minimal monthly stipend per person is 3,850 shekels. The minimal sum will be updated according to the index as it stands on March 1st in relation to the index on March 1st, 2008.

If the accumulated sum in the provident fund is smaller than the minimal stipend sum – the withdrawal will be conducted according to the discounting method  in the provident fund’s protocol.

The minimal stipend is made up of all the stipends that the client has accumulated (including pension funds and/or other provident funds for which the client is eligible).

A non-paying provident fund is a provident fund for accumulation purposes. This fund is not permitted to pay the client money; it can only transfer the money to a paying provident fund.

A provident fund that is not defined as a pension fund is a non-paying provident fund. The client can only withdraw money from a “non-paying provident fund” by transferring the money to a “paying provident fund” (e.g., pension fund, executive pension insurance, etc.) at the date of their retirement.

Here is an example of money that was deposited before 2008:

Money that was deposited into a provident fund for freelancers before 2006 can be withdrawn at the earliest of the two following dates: (1) 15 years after the first deposit into the account, or (2) the age of retirement. Money that was deposited from January 1st, 2006 onward can be withdrawn only after age 60. This money can be withdrawn before those dates at an income tax fee, a fee of 35% of the balance accumulated by the client.

In a capital withdrawal of money at the age of retirement, the accumulated profits are exempt from the capital gain tax (as opposed to other savings plans, in which there is a 25% tax on the realized profit).

The account’s profits stem from the managing company’s investments. The managing company charges the client with management fees, which are calculated based on the balance that was accumulated for the client.

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We examine the totality of assets comprehensively and professionally and build the most appropriate investment strategy for the client’s needs. The asset portfolio is continually and meticulously examined by a team of experts, who also conduct risk management and examine the products.

We are experienced and have great expertise in the financial fields. We provide personal support and supervision for our clients:

We are experienced and have great expertise in the financial fields. We provide personal support and supervision for our clients:

  1. Building an investment strategy according to the family unit’s needs.
  2. Implementing the program while examining the costs and being careful in choosing the investment managers that take care of our client’s money.
  3. As part of the supervision, we send periodical reports with an updated status report.
  4. Making adjustments to the plan based on changes in the client’s needs and adjusting the products to the state of the market and regulation.
  5. We are careful in choosing the external service providers we use, e.g., taxation consultants and accountants, personal legal support, generational inheritance, and escrow accounts.

Sparta Capital

Sparta believes in viewing each person and their personal needs and providing the most professional package for each client. Sparta isn’t for everyone: we don’t guarantee yield, but we do promise to employ the most comprehensive knowledge in the market and to adjust it to your needs. Sparta provides knowledge and professionalism that were previously reserved for institutional clients, providing its clients with access to them. Sparta cares for the client, they are not another portfolio.