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>' ~-4^ !»• . 4 -|M.V’ A < ~ ■POT .. V «•.% ~ iV Page 22* THE SOUTHERN ISRAELITE ‘Octobter 3ly 1986 Will Shamir stay the economic course? by Elmer L. Winter Chairman, Committee for Economic Growth oflsrael Shimon Peres and Yitzhak Shamir have changed jobs in Israel's Coalition Government. As Shamir takes over the posi tion of Prime Minister of Israel, the question is being raised, “Will Shamir stay the economic course set by the coalition during these past two years?” Having been in Israel these past two weeks, 1 was able to form some impressions that lead me to predict that the next two years will be “more of the same” on the economic front—provided the coalition stays together. I foresee that Shamir will place high priority on economic growth. The coalition has had as one of its major goals during the past two years restoring Israel’s econ omy. As a result, unusual steps were taken to bring the economy to a point where Israel can now move from economic stability to growth. A recent poll shows that 73 percent of the Israelis favor the economic program of the past two years and want to con tinue “as is.” It is difficult to see how the Shamir government could thwart the wishes of such a large percentage of the population. I anticipate that Peres, as for eign minister, will continue to play an active role in economic development. Inflation should remain at 1 to 2 percent a month. Israel brought inflation down from 20 percent a month—a herculean task. There’s every reason to believe that infla tion will not exceed 1 to 2 percent a month during the coming year. 1 also expect that the govern ment of Israel will sell some of its companies. For a number of years, the policy has been to sell some of the government-owned non defense companies. Industry and Trade Minister Ariel Sharon has called for the sale of government- owned companies, with the funds raised to be used to establish new high-tech industry. Two government-owned com panies have already been offered for sale. Israel Chemicals Ltd. has proposed the sale of its stake in Cables of Zion-approximately 69 percent in equity and voting— and Oil Refineries Ltd. is consid ering the possibility of divesting itself of its 23.6 percent share of Haifa Chemicals. We can look for some activity in the area of denationalization—but not too much in the coming year. Meanwhile, exports should increase during the next two years. Israel needs to substantially expand her exports to help replace the $1.5 billion that the govern- Combining two great names Pazol and Northside Realty! For your Home Buying and Selling Needs call Mrs. Tricia Pazol 446-9300 Mrs. Lester (Tricia) Pazol. MF Northside Realty QJ Lester Pazol's new book is at Macy’s. WEEKLY QUOTE FROM LESTER’S BOOK "Being in control allows optimum performance and peace of mind—thusly, being prepared is the key to success and happiness." Lester Pazol 21 YEARS jHENNESSY r (jadiMac JAGUAR CALL FOR A TEST DRIVE 261-5700 ment formerly received from the United States as emergency as sistance. The pressure will be on to attract more American com panies to open facilities in Israel to take advantage of the Free Trade Agreement. Recently, Van Heusen Com pany announced a joint venture where it will manufacture 1.5 million shirts annually in Israel. Van Heusen will be joining more than 150 U.S. companies operat ing in Israel. Exports should increase 10 percent per annum, w hile imports decline. I predict, as well, that Israel may receive a reduction in its interest rate on debts due to the United States; that Israel will make further cuts in her budget, with the effort continuing to reduce the number of people em ployed in various branches of the government sector; and that pro duction of the Lavi jet-fighter will continue, despite some ob jections by the U.S. government. Israel believes the Lavi is of great strategic importance regarding the security of the country. Israel also will participate in the U.S. government’s Star Wars program. The two countries have entered into an agreement for Israel to conduct research in the Strategic Defense Initiative pro gram. Israel has signed three contracts with the United States in recent months to perform such research. The odds are in favor of the Coalition Government remaining intact in the immediate future. Neither the Likud or the Labor Party will want to initiate a divorce unless there are compel ling outside forces at work. Despite the popularity of Shimon Peres (77 percent), a recent poll showed that the Labor Party would receive only 42 per cent of the vote if elections were held how, while the Likud would re ceive 28 percent. As long as these conditions prevail, it appears that the coalition will continue and the government, headed by Sha mir, will stay the economic course. Tips on retirement plans Many people don’t fully under stand what their retirement plan offers other than money for the “golden years.” Now is a good time to review your company’s retirement provisions to under stand what kind of coverage you have, when you can expect pay ments and what you can do now to help ensure your financial security during your retirement years. To help you understand your plan, the Georgia Society ot CPAs outlines the essential characteris tics of the four major retirement plans: defined benefit, defined contribution, deferred compen sation and profit sharing. Defined benefit pension plans provide a promise to pay partici pants benefits over a period of years after retirement. The bene fits are determined by such fac tors as the individual’s age, years of service and total wages earned. As a participant in this plan, you accrue benefits payable at a pre determined time in the future. Your benefits are funded by em ployer contributions which can fluctuate depending on statistics of the life expectancy of the par ticipants and investment computa tions. Defined contribution plans re quire individual accounts for each plan participant. The amount you will receive from the plan depends upon your employer and employ ees contributions, the income, expenses, gains and losses cre dited to your account. Under a defined contribution plan, the contribution rate is generally determined by the par ticipant’s salary, profits of the employer, or both. When a participant retires or withdraws from the plan, the amount allocated to the partici pant’s account represents his or her accumulated benefit, and it may be paid to the participant or used to purchase an annuity. In contrast to defined benefit plans, the amount of benefits a partici pant will ultimately receive is not determined until the time of dis tribution. As a participant, you benefit from successful investments by the trustees, but also bear the risk of investment loss, according to CPAs. One example of a defined con tribution is a money purchase plan. Here, your employer’s con tributions are based on a definite formula, irrespective of profits. Usually the employer’s annual contribution is a fixed percen tage of your compensation. For example, the plan might provide that each year your employer will contribute on your behalf 10 per cent of your compensation for that year. In a profit sharing plan, a company agrees to make a con tribution, at its discretion, out of profits. Amounts contributed to the plan are invested and accum ulate tax free for eventual distri bution to participants or their beneficiaries either at retirement, New Home Sites BATTLE CREEK Subdivision on Northland Drive Located !4 mile south of The New Hebrew Academy call 351-7620 Weekdays 9 a.m. to 5 p.m. after a fixed number of years, or upon the occurrence of some specified event such as disability, death, or termination of employ ment. Unlike a defined benefit plan or a money purchase pension plan, contributions are based on a percentage of profits. If the employer has no profit in a given year, no contribution could be made for that year unless the plan provides for contributions from prior retained earnings. A good example here is a stock bonus plan. As a participant, you are given the option of receiving your benefit payments in the form of company stock. Just as in profit sharing plans, it’s up to the employer to decide each year how much, if anything, he or she wants to contribute. The fourth retirement plan is called deferred compensation. The easiest way to explain this plan is to describe one of its more well known options, the 401 (k). This is a deferred payment plan in the form of a salary reduction agree ment where your savings dollars are deducted from your gross income and your interest is tax deferred. Depending upon the percentage of your annual salary that you elect to contribute to the plan, your employer may also make a contribution. Since this varies from plan to plan, it is wise to consult with your employer to find out exactly what they offer. Benefits may not be distrib uted until you retire, become dis abled, die or reach age 59 l /i. Ear lier distribution is possible, but only in certain hardship cases. Many of the above mentioned plans provide vested benefits, those that are available to an employee at retirement even if he or she leaves the company’s em ployment before the age of retire ment. Vesting occurs after you have worked for your employer a prescribed period of time. Which is the best plan? Your employer chooses a plan accord ing to certain objectives, the amount of money the company can contribute and the ages of those who choose to participate or who automatically are covered. Chances are your plan incorpo rates an investment feature which, if managed well, will enhance your retirement plan. This material prepared and supplied by the Georgia Society of Certified Public Accountants Inc.