Israel stands out favorably in indicators of growth, stability, and the independence of its pension savings system. The OECD published its Pensions Outlook 2026 report, reviewing pension savings systems worldwide under the title "Are We Saving Enough for Retirement?"
The report highlights Israel's high pension participation rate and places it among the leading countries in saver returns, system stability, and a low dependency ratio between the pension system and the state budget. The report examined the development of pension assets in OECD and other countries from the early 2000s through 2025, asset growth, the gap between actual savings and retirement requirements, investments in sustainability, and the impact of financial advisory services.
Main findings
One of the highest participation rates in the world: Israel is presented in the report as one of the prominent global examples of expanding the population's participation rate in pension savings. This is attributed to the mandatory pension contribution mandate introduced in 2008, which led to a more than 40% increase in the participation rate.
Second place in saver returns: Israeli savers enjoyed high returns over the past decade compared to most measured countries. The average real return of pension funds, after investment expenses, reached approximately 5.5% annually, the second highest among OECD countries. This follows 2025 data in which Israel ranked among the top three countries in the organization with a real return of approximately 11%.
Low dependency ratio on the state: Israel's pension system is largely based on personal savings, generating low dependence on the state budget and public expenditure balances. This model prevents the need for state funding or covering shortfalls in public funds – moves that could burden the economy and significantly increase the national debt.
Contribution rates within the normal range: Measurements show that pension deposit rates in Israel are not extreme (neither too low nor too high compared to other countries) and fall within the international normal range.
Amit Gal, supervisor of capital markets, insurance, and savings, stated following the data: "The OECD report joins international recognition of the strength of Israel's pension savings system, coming just about a month after the global Mercer index also included the Israeli pension system in the top five best in the world. The report's data prove the importance of the regulatory line led by the Capital Market Authority as a consumer-social regulator operating with a vision for the general public and protecting its rights. We are proud to shape a market that connects broad public-economic resilience with the financial needs of every citizen, ensuring full protection of public assets regardless of their financial literacy."
'A return that could double savings within about 13 years'
Israel Atiya, CEO of the Financial Planning Center, said that "the Israeli pension system proves that investment success is not measured in a single year but over time. An average annual real return of approximately 5.5% over the past decade, placing Israel second among reporting OECD countries, alongside a real return of approximately 11% in 2025, testifies to the strength of the Israeli pension savings market. Ahead of it stand Poland with an exceptional return of approximately 30% and Costa Rica. At the other end is the Netherlands, which posted a negative real return of 5.4%. An annual real return of 5.5% could double savings within about 13 years even without additional deposits. This is the power of compound interest in long-term financial planning."
"Alongside the impressive achievements of Israel's pension system, high returns must not be confused with a sufficient pension. The OECD model points out that to reach a target of 70% income replacement in retirement, an average-earning male employee in Israel may need a supplementary deposit of approximately 10.4% of his salary, and a woman approximately 15.5%. This is a gap that is approximately 49% higher for women compared to men. This is a warning sign that requires a shift from thinking focused solely on returns and accumulation to thinking focused on future pensions, continuity of contributions, adjustment of investment tracks, reduction of management fees, and retirement planning."