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Leumi Group

Pilot project for providing pension consultation

August 31st, 2008


Having received a pension consultation license, Leumi is launching a pilot project for providing pension consultation services at 8 branches.


Baruch Lederman: "Our efficient distribution network and the hundreds of pension consultants will assist Leumi to transmit objective pension consultation news to the four corners of Israel."


At the end of last week, Bank Leumi obtained a pension consultation license from the Capital Market, Insurance and Savings Commissioner at the Ministry of Finance.


Having received the license, Leumi intends launching a pilot project at eight of the group's branches which will, inter alia, examine: the Best Advice system distribution and collection interfaces, the consultation process proceedings and the entities involved both in and outside of the bank. During the pilot stage, eight branches, which represent various business divisions at the bank, have been selected: The Banking Division, the Commercial Banking Division and the International and Private Banking Division. The branches participating in the pilot project are: From the Banking Division – the Holon, Bat Yam, Rishon Lezion, Kiryat Sharet and Afula branches; from the Commercial Banking Division -- The Diamond Exchange branch in Ramat Gan; the International and Private Banking Division – The Millennium branch in Tel Aviv. The pilot project will also include the Um el Fahum branch of the Arab-Israel Bank.


On receipt of the license and launching of the pilot project at the branches, the head of the Banking Division at Leumi, Mr. Baruch Lederman said that Leumi intends transmitting objective pension consultation news to the four corners of Israel through the group's 249 branches. "The entry of the banks has brought objective consultation news into the pension consultation field and I am convinced that Leumi's entry with its large distribution network and hundreds of pension consultants will assist in bringing this news to the four corners of Israel. Objective pension consultation is most important to every Israeli citizen. I hope that our activity in the field would assist the customers to arrange their financial future intelligently, enabling to manage their savings more correctly and maintain a proper standard of living on retirement," Lederman said.


The pilot project executed by the bank will take place over a period of six weeks and, on its conclusion, the bank expects to expand the service to the entire country in pursuance of the directives in the consultation license given to it and the general draft determined in an agreement between the Capital Market Commissioner at the Ministry of Finance and the Knesset Finance Committee chairperson. In pursuance of this draft, Leumi is permitted to provide pension consultation services to independent customers throughout the country and to wage-earners residing in the peripheral settlements (national priority regions A and B. pursuant to the Capital Investment Encouragement Law, excluding Ashdod, Ashkelon, Beer Sheva and Jerusalem as well as all the settlements in the Arab sector, including those that are not located in the national priority regions).


Already in 2006, Leumi began organizing itself for entry into the pension consultation field and its investments in this field are estimated at more than NIS 120 million. As a part of the organization, a new banking division department was established -- The Pension Consultation Department under the Investment sector, managed by Mr. Danny Cohen, deputy head of the Banking Division. The department, under the management of Ms Avivit Klein, coordinates the bank's general deployment in the field.


As part of the deployment, the bank has trained investment consultants as pension consultants, enlisted expert pension consultants with vast experience in the field and dozens of academic personnel, who have been trained for the function of pension consultation in the branches. All in all, the bank currently has approx. 550 pension consultants, who have undergone all the training stages and the Capital Market Division, Insurance and Savings examinations at the Ministry of Finance, at its disposal.


On the technological level, the bank has developed a unique Best Advice system, which will assist pension consultants in providing objective and optimal consultations to customers regarding the pension course that they have to choose while considering the their data, needs and preferences, including the pension assets that they currently hold. The system was developed with the assistance of expert external consultants. The bank has also organized itself from an operational aspect by signing distribution agreements with all the pension funds and with most of the provident and enrichment fund managers. Thus, the consultation provided in the various types of pension products would be at the most objective level.


It should be noted that as a part of implementing the Bachar Committees decisions and for the purposes of its entry into the pension consultation field, Leumi has sold the subsidiaries, "Psagot Ofek and "Leumi Pia," the provident funds that it managed and the enrichment fund company, Kahal (which were held jointly with Discount). Furthermore, the bank has transferred the bank employees' provident fund to the management of the employees.