Meitav to return 1.2 million shekels to members: Who is eligible?
Meitav raised management fees for members in the default pension fund during the first 10 years, despite the Capital Market Authority prohibiting it. As part of a settlement, Meitav will return money to 10,500 customers, totaling 1.2 million shekels. Active savers will receive the refund in the form of an exemption from management fees for 7 months.
The Regional Labor Court in Tel Aviv has approved a settlement agreement in a class action lawsuit against the pension company Meitav. The company will return 1.2 million shekels to 10,500 members of the default pension fund for whom it raised management fees after they became 'inactive' (meaning after 12 months without deposits), despite the fact that they later resumed contributions.
The Capital Market Authority clarified to the court, in response to the lawsuit filed by Or Traiber, that it strictly prohibits raising management fees during the first 10 years of participation in a default pension fund.
Traiber joined the fund in May 2017 with management fees of 1.31% of the deposit and 0.01% of the accumulated balance. After a 21-month break in contributions, Traiber resumed payments in January 2020, but Meitav raised his deposit management fee to 2.49%. Consequently, he sued Meitav for 1,827 shekels and filed a class action lawsuit totaling 3.5 million shekels.
Meitav's position: Some members actually benefited
Meitav argued that members whose deposits stopped for over 12 months became 'inactive members' under the fund's bylaws, and upon resuming deposits, they were subject to the management fees customary in the default fund at that time.
Furthermore, Meitav claimed the policy was applied uniformly, noting that in some cases, management fees at the time of renewal were lower than the original rates. According to the company, a significant portion of members were not harmed but actually benefited from the change. Meitav added that since March 2023, it has updated its systems to ensure management fees are maintained for 10 years in all cases.
Under the settlement reached, Meitav will return 75% of the nominal difference collected from affected customers:
-
Active members will receive the refund via an exemption from management fees for 7 months.
-
Inactive members will receive the money back to their accounts, provided they are owed more than 50 shekels.
Additionally, management fees will be updated to the low rate they were entitled to at the time of their initial enrollment. It was also determined that Meitav will not collect the difference from the group that, according to the company, benefited from the change and saw their fees decrease.
In total, Meitav will pay 1.17 million shekels to the class action group, averaging about 111 shekels per person. The plaintiff will receive 4.5% of the refund amount, and his lawyer will receive 17.5%.
