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Self-employed can take unemployment pay from pension

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Israel’s Ministry of Finance is to allow the self-employed to withdraw up to one third of the savings in their compulsory private pension plans as a kind of “unemployment payment” to help them survive the Covid-19 crisis. Minister of Finance Israel Katz and the Supervisor of the Capital Market, Insurance and Savings Moshe Bareket have announced that they will amend the regulations so that the self-employed who have closed their businesses can withdraw the money.

However, it looks like the Covid-19 crisis is simply an excuse for the move with such an amendment to the terms of private pension plans meant to pass back in 2017, when the regulations for compulsory private pension plans for the self-employed was first introduced.

Private pension plans were made compulsory for the self-employed in 2017 to bring them in line with the compulsory pension plan for salaried employees. The regulation included a minimum amount to set aside into the pension or provident fund into the plan by the self employed while the State would designate some of the savings as a type of unemployment pay for the self employed.

The ability of the self-employed to withdraw unemployment pay was set in law from the start but the ability to actually do so was dependent on regulations to be implemented by the Ministry of Finance – something that was not done even in the first wave of Covid-19 pandemic in the spring.

The minimum savings that the self-employed must set aside is 4.45% of income up to an amount of the median salary in the economy. Above the median salary and up to the average salary in the economy, the self-employed are required to set aside at least 12.55%. Two thirds of the amount set aside is for the pension fund and one third can be used “as a component for assistance during unemployment.”

Until now the self-employed could only withdraw their pension savings when reaching the retirement age, or otherwise pay a tax fine.

However, the Insurance Agents Association strongly opposes the measure. “It is inconceivable that the State should recommend the savers dip into their pensions and future savings by encouraging redeeming money through tax exemtion on the compensation they have saved. We are talking about small business owners whose pension savings are the only income that they will have when they reach retirement age. The State is encouraging them to redeem their money because it has a budgetary problem following the Covid-19 crisis. It is a disgrace and shameful to call this unemployment pay.” 

Published by Globes, Israel business news – en.globes.co.il – on October 15, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020




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German factories hum, services shrink in two-speed economy: PMI By Reuters

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© Reuters. FILE PHOTO: General view shows restaurant of hotel castle Elmau in Kruen

BERLIN (Reuters) – German private sector activity grew for the fourth month running in October, a survey showed on Friday, but while the manufacturing sector expanded at a faster rate, services activity shrank, suggesting Europe’s largest economy is operating at two speeds.

Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, slipped to 54.5 in October from 54.7 the previous month.

The reading surpassed the consensus forecast of analysts polled by Reuters, who expected a decline to 53.2, and was well above the 50 mark that separates growth from contraction.

Manufacturing proved robust, with the flash PMI rising to 58.0, its highest level since April 2018. The service sector contracted, however, with the flash PMI dipping to 48.9.

Markit economist Phil Smith said the survey data pointed to resilience in the economy in the face of a second wave of coronavirus cases, with the decline in service sector activity quite limited so far while manufacturing remained solid.

“It’s increasingly looking like a two-speed economy,” he said. “Manufacturing businesses have been able to continue operating with less disruption from any new restrictions than many of their service sector counterparts, whilst at the same time reaping the benefits of a resurgence in global goods trade.”

“As more manufacturers get back or close to pre-COVID-19 levels of activity, however, sustaining growth is going to become more challenging,” Smith added.

The German government expects gross domestic product to shrink in 2020 by 5.8% before rebounding by 4.4% next year.

Berlin has since March implemented an array of rescue and stimulus measures, financed with record new borrowing of some 218 billion euros, which it hopes will help consumers and companies get out of the crisis more quickly.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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China to set five-year plan for steering economy through choppy waters By Reuters

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© Reuters. FILE PHOTO: Containers are seen at the Yangshan Deep-Water Port in Shanghai

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By Kevin Yao

BEIJING (Reuters) – China’s top leaders will chart the country’s economic course for 2021-2025 at a key meeting starting on Monday, seeking to balance growth and reforms to avoid stagnation amid an uncertain global outlook and deepening tensions with the United States.

President Xi Jinping and members of the Central Committee, the largest of the ruling Communist Party’s elite decision-making bodies, will meet on Oct. 26-29 behind closed doors to lay out the 14th five-year plan, a blueprint for economic and social development.

The plan and its execution will be crucial for China to avoid the so-called “middle income” trap, policy insiders say, referring to the struggle of many economies to boost productivity and shift towards higher value-added industries.

“Although the Chinese government has been calling for a transition in the development model for a number of years, we think the next five years will be particularly important, both politically and economically,” Goldman Sachs (NYSE:) economists wrote in a note ahead of the plenum, the fifth meeting of the Central Committee since the 2017 party congress.

Sustaining steady growth will be the priority, even as expectations grow that top leaders could announce fresh reforms to spur domestic demand, innovation and self-reliance under Xi’s new “dual circulation” strategy, policy insiders said.

Investors also will be closely watching to see if China moves to a more flexible economic growth target, after dropping it this year for the first time since 2002 due to the uncertainty caused by the coronavirus crisis. Some analysts say dropping growth targets would reduce the country’s reliance on debt-fueled stimulus and encourage more productive investment.

China, where the COVID-19 outbreak first emerged, has mounted a robust economic rebound after quashing the domestic spread of the virus, but global prospects remain gloomy and the pandemic has added to tensions with the United States.

“China’s potential growth rate will slow further due to the aging population, weakening effects from investment in driving growth and diminishing dividends from globalisation,” said Tang Jianwei, senior economist at Bank of Communications.

“To reverse the slowdown, we need deep-rooted reforms.”

Policy sources have told Reuters that China’s leaders are set to endorse a lower growth target compared with 2016-2020.

Government think tanks and economists have made recommendations for average annual gross domestic product (GDP) growth targets including “around 5%”, 5-5.5% to 5-6%, the sources said.

The plan to be discussed and approved by leaders next week is expected to be unveiled at the annual parliament meeting in early 2021.

“We need to maintain a balance between development, stability, and risk prevention,” said a policy insider. “Macro adjustments will be more difficult and this will present a test for policymakers.”

INWARD SHIFT

Xi’s strategy to guide the next phase of development, which points to an inward economic shift, has fanned calls by government advisers for reforms to unleash domestic growth drivers, including loosening curbs on residency and land rights and boosting household incomes.

Speeding up reform of the household registration “hukou” system would enable migrant workers to enjoy more social welfare benefits, while land reform would enable farmers get a bigger share of the gains from land deals. Both measures would spur urbanisation and consumption.

Expected moves to further free up interest rates and expand the role of capital markets would address distortions in credit allocation that see huge state banks lend to state companies while the private sector is often deprived of credit.

Chinese leaders are also expected to discuss further plans to curb greenhouse gas emissions and ease reliance on imported technology, especially semiconductors, as Washington squeezes Chinese tech giants including Huawei Technologies Co and Semiconductor Manufacturing International Corp (HK:).





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China imposes anti-dumping measures on U.S., South Korea, EU rubber imports By Reuters

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BEIJING (Reuters) – China’s Ministry of Commerce said on Friday that it will impose temporary anti-dumping measures on some rubber imports from the United States, South Korea, and the European Union from Oct. 28.

Beijing will impose anti-dumping deposits on ethylene propylene diene monomer rubber imports from the countries and region, the ministry said in a statement on its website.

The measures follow an investigation launched in June 2019.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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