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Pension-age workers seek a reason for getting up in the morning

November 26, 2006. Ha'aretz: Ruth Sinai
Yitzhak Aharonovich was a department head at Bezeq. At age 56 he was asked to retire.

"So I would see they were serious, they gave me a new position. I had a bombastic title with no content," Aharonovich relates. He retired at 57 with good terms - a retirement payment and a salary until age 67, when he will be eligible for pension payments and a National Insurance Institute allowance.

Despite the economic benefits, it took him time to recover.

"I had a very bad crisis," Aharonovich says. "I developed high blood pressure. From a person with a key position who dealt with everything, I reached the point where I thought my telephone was broken. I kept checking it."

Aharonovich quickly found a new job in the communications industry, but he was asked to retire from it as well because it cost too much to employ him. He has not worked for nearly four years.

"I pass the time," he says. Aharonovich goes to the gym, babysits his grandchildren, volunteers with the traffic police and attends activities at Bezeq's retirees' club. Once a week he sees a movie with friends and goes to a cafe afterward. "I'm not bored," he concludes.

In the past give years tens of thousands of employees at Bezeq, the banks, government offices, universities and many other institutions have retired early. According to the Industry, Trade and Labor Ministry's Planning, Research and Economy Administration, in 2005 a total of 134,000 Israelis between 45 and 65 retired from the job market. Half were under age 60. In 2006, tens of thousands more joined their ranks.

A study last year by Yuval Mazar of the Bank of Israel found that half of those leaving the public sector - 30 percent of the men and 60 percent of the women - do so before the official retirement age. Since 2001 the average retirement age has been dropping due to government incentives and the fear that retirement terms will worsen. Despite the incentives, these early retirees earned nearly 50 percent less than they did immediately prior to retirement, Mazar found.

According to a survey by Club 50, a company that provides information and services to those aged 50 and up, the employment rate for 50- to 65-year-olds declined from 59 percent in 2004 to 50 percent in 2005, in part due to early retirement programs.

In most cases, those taking early retirement are costly to employ because of their seniority, or are considered less productive and current than they used to be.

The country's universities have been offering early retirement for several years due to budget pressures, out of a conscious effort to reduce the average age of their scientists and lecturers.

"A 50-year-old mathematician isn't going to win the Nobel Prize," said a senior professor who asked to remain anonymous in order to avoid angering his colleagues. "A 35-year-old scientist is more productive than a 55-year-old one," he said. "There's no doubt the university got the best out of me in the 15 years following my doctorate."

Many Ph.D.'s were put out for retirement with good conditions, but reality does not always match one's pension planning. Some early retirees invested their retirement payments into businesses that failed. This happened to N.H., who retired from a government ministry at age 57. "I was ready. If I hadn't been kicked out, maybe I wouldn't have dared, but when it happened I thought it was a good thing," N.H. says. He opened the electronic gadget store he had been dreaming about for years, but it soon went bankrupt.

While some early retirees are economically or mentally ready to retire, more than a few retire against their will. Yisrael Perl was one of 900 employees, almost half of them in their fifties, who were pushed out of Bank Hapoalim in 2003. He says that some are living on a monthly pension of NIS 4,000 to 5,000, 30 to 60 percent less than what they earned. Since they are young retirees, their spending is still high.

"Some are helping their children, paying for weddings, supporting elderly parents," Perl explains. He and 500 of his former colleagues are suing the bank for its alleged failure to live up to its agreements.

Rina Laor of the Joint Distribution Committee, who develops adult employment programs, says many retired and dismissed workers in their fifties are ashamed to be out of work and are forced to cash in life insurance policies
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