In the first stage, relevant policies were developed. The Portland Trust prepared a preliminary feasibility study, by which international and regional experiences, including those of Israel and Jordan, were viewed. Of the main conclusions reached by the feasibility study is that the value of pension funds equals or exceeds the domestic income. Therefore, pension funds are a real source of wealth. However, Palestinians lack necessary capacities to incorporate a pension fund. Moreover, Palestinian governments failed in creating such a fund. A compulsory pension system for the private sector employees is unavailable. At least 40 Palestinian companies and establishments do not invest in project (Their assets are deposited at banks; i.e. they are documented on paper only. A clear system of subscriptions paid by employees is not in place). Thus, joint pension fund(s) may be created for these companies and establishments. As such, employees will be entitled to revenues of at least 12% or 13%, and not just 2%

 

 Hulileh explained that current challenges are posed by the legal framework of the pension system. Why should we create a nongovernmental pension system under the new amended Law on Retirement? Recently, a committee, comprising legal and economic experts, was established to propose proper solutions as well as submit them to the Council of Ministers.

 

In the ensuing discussion, Dr. Atef Alawneh, Director General of the Palestinian Capital Market Authority and an expert on pension systems, commented that the proposed pension system should mainly be administratively and financially independent of the government's interference. As such, the pension fund can win the private sector's trust. The pension fund should also be capable of self-financing. Furthermore, members on the fund should be entitled to select an appropriate mechanism to pay their due subscriptions. The pension fund shall also comprise four components: social welfare; old age pension; pension savings; and health insurance.