Per the Pashut Neto calculator, in 2026 a 2,000 ₪ monthly pension deposit for 30 years at a 5% annual return ends about 182,000 ₪ apart between maximum management fees (6% of each deposit / 0.5% per year of the accumulation) and fees of 1.5% / 0.1% — about 1,428,000 ₪ versus about 1,610,000 ₪ at retirement.
How is it calculated?
The calculator runs two fee tracks on identical deposits and the same assumed return. Each monthly deposit is multiplied by (1 − deposit fee), and the balance then grows monthly at (annual return − accumulation fee), compounded. In Israeli pension funds the legal maximum management fees (dmei nihul) are 6% of each deposit and 0.5% per year of the accumulation; default funds (kranot brerat mechdal) charge around 1% and 0.22%.
In the worked example — 2,000 ₪ per month for 30 years at a 5% average annual return — Track A at the legal maximum (6% / 0.5%) ends at about 1,428,000 ₪, while Track B at fees of 1.5% / 0.1% ends at about 1,610,000 ₪. The gap is about 182,000 ₪, and it grows with the period, because the difference itself compounds over decades. Past returns do not guarantee future returns.
Frequently asked questions
What are the maximum pension management fees in Israel?
The legal maxima are 6% of each deposit and 0.5% per year of the accumulation. In the example — 2,000 ₪ a month for 30 years at 5% — maximum fees end at about 1,428,000 ₪ at retirement.
How much do Israeli default pension funds charge?
Default funds (kranot brerat mechdal) charge around 1% of each deposit and 0.22% per year of the accumulation, compared with the legal maxima of 6% and 0.5%.
How much difference do pension management fees make?
In the example — 2,000 ₪ a month for 30 years at 5% — moving from maximum fees to 1.5%/0.1% ends about 182,000 ₪ higher (about 1,610,000 ₪ vs about 1,428,000 ₪). The gap depends on the deposit, the period, and the return.
This calculation is a general estimate for illustration only. It does not constitute tax, pension, or investment advice, nor a substitute for personal advice from a licensed professional, and should not be relied on for decisions.
