Israel’s Mossad intelligence agency may have broken the law by giving retired agents a discount in national insurance payments – a financial bonus potentially worth tens of thousands of shekels – according to documents obtained by Shomrim. An official with ties to the National Insurance Institute (NII) confirmed the details.

As is the case in the IDF, members of Israel’s security services are allowed to opt for early retirement and entitled to what is known as a bridging pension until they reach the legal retirement age. Once taking early retirement, they are offered the opportunity to “capitalize” their pension - a kind of down payment against their future pension. In other words, they get a large lump sum when they take early retirement and a reduced monthly pension, up to a ceiling of 25 percent of their monthly pension, for six years.

In 2004, a dispute arose between the Mossad and the NII, when it became apparent that the intelligence agency was only deducting national insurance contributions from the reduced pension after capitalization and not the entire sum that was paid to retired agents. The documents show that as far back as at least 2007, the NII sent an annual memorandum to the Mossad, reminding it to deduct national insurance contributions from the sum total of the pension, as if there was no capitalization, but the organization continued with this practice. The difference can reach several hundred shekels a month and could be as much as tens of thousands of shekels for each retiree.

“It is inconceivable that someone who has capitalized their pension is actually granting themselves an indirect exemption from paying national insurance contributions – in violation of the law,” an official with ties to the NII told Shomrim. “If they get, say, 1 million shekels from the capitalization and they have a de facto exemption until the age of 67, the financial significance is massive.”

In 2020, an external company took over salaries and pensions for Mossad employees and retirees. This company did adhere to NII regulations and deducted national insurance contributions from the sum total of the pension, as if there had been no capitalization. This meant that hundreds of retired agents suddenly discovered that their pensions were hundreds of shekels lighter each month. Angry and upset, they turned to Agmon – an organization representing retired Mossad agents – for help.

Agmon worked with senior Mossad officials and the NII and, at a certain stage, there was even a meeting between then-Mossad director Yossi Cohen and the management of the NII. The meeting, according to Mossad retirees, was a success and in early March 2021 they were told that the decision had been frozen and things were to return to how they were before 2004. In other words, anyone who had retired before 2004 would continue to pay national insurance contributions only on the reduced pension and any such contributions that had already been deducted were repaid. The meeting was described as “an important and positive initiative” on Cohen’s part. It is not clear what decision was taken with regard to anyone who retired after this date.

The Prime Minister's Office, which is responsible for the Mossad, submitted the following response: “All deductions from the pensions of retirees from the Institute for Intelligence and Special Operations [the Mossad – D.D.] in budgetary pensions are made according to the law and the opinion of the relevant authorities.”

Yossi Cohen said in response that he does not recall the incident.

The National Insurance Institute submitted this response: “The NII operates in accordance with the regulations prescribed by law and case law, which determined that the calculation of payment to the National Insurance Institute in cases of pension capitalization by retired members of the security organizations is different. It should be noted that retired members of the security agencies also pay national insurance and are not exempt from payment.”