The Israel Electric Corporation (IEC) (TASE: ELEC.B22) is demanding NIS 2.5 billion to fund the new pension arrangements of its employees. A Knesset bill on the matter will be discussed tomorrow by the Labor, Health and Welfare Committee headed by MK Haim Katz (Likud) ahead of its second and third reading in the plenum.
The Public Utilities Authority (Electricity) estimates that passing the bill for the full sum or part of it will push up electricity rates. Rates would have to rise 10% for one year to cover the full amount, although the Ministry of Finance insists that such a new law would not influence electricity rates.
The Knesset bill is part of the collective agreement signed between the government, the IEC workers committee and the Histadrut, Federation of General Labor on January 31, 2011. The agreement changed the pension arrangements, which were previously linked to salaries of current employees, after it became clear that the real value of pensions were being eroded.
Katz told "Globes" that he had no intentions of allowing electricity rates to be raised as part of the law and that the law would not be approved if the relevant clause was not omitted.
Published by Globes, Israel business news - www.globes-online.com - on January 24, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012