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Pensions Funds and Ribbis

Question:

What do I need to do to avoid any ribbis problems in my Israeli pension. Must I sign for the “kosher” option?

Answer:

This would depend on the details of the pension, how it is structured etc. There are definitely potential ribbis issues with such an arrangement with a Jewish company. There are a number of ways to avoid ribbis and/or leniencies to rely on, including signing a “heter iska” arrangement or relying on the fact that it is a public company and has no private owners. It is not clear what the kosher option entails, as these leniencies could be applied any pension plan. I believe some kosher plans take into account other considerations such as avoiding companies that do not keep Shabbos or Kashrus.

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