Advanced Study Fund (Trust fund) is medium ranged savings plan. The employer and the employee (or self-employed) allocates a monthly payment to an investment plan which yields and grants tax benefits.

Shifting the accumulated money from the provident and trust funds to different companies does not effect the seniority or credits, and actually improves the yield significantly. This trust fund is a savings fund for salaried employees, self-employed, kibbutz and "moshav shitufi" members, which was initially meant to be used for funding continuing educational programs, such as professional conferences and additional educational courses. Now a days it is mostly used as a general medium ranged savings channel- the only channel which is not for the long run, and that remains tax free (after 6 years) after the tax reform in the Israeli capital market.

The amounts and the profits that are accumulated in the trust fund are tax free, depending on several conditions. The state does not impose restrictions on the use of the money that was accumulated at the end of 6 years, therefore it can be used for anything that you choose to use it for. This fact makes these trust funds merely a savings plan (tax free), which in many cases does not go towards educational programs.

Please note

The payroll components that will be calculated for the deposit to the trust fund and determined in the collective labor agreement or in the agreement between the employer and the employee. Nevertheless, in order to calculate income tax benefits, the reference to the deposits is from the gross salary, not including overtime and reimbursements.

 

Who is Eligible?

Salaried employees and self employed, according to the following description:

Salaried Employees

The employer is not legally committed to allocate to the trust fund, but there are collective agreements and expansion orders in different sectors that do require the employer to allocate to the trust fund. A salaried employee that his employer is not legally committed to allocate to the trust fund, cannot open this trust fund on his own. If the salaried employee is simultaneously also self employed (licensed dealer or exempt dealer), he can open this trust fund as a self-employed.

Contract worker (manpower workers)-

If at your work place he employer is committed to allocate to the trust fund for his workers, manpower workers are also eligible for this benefit, 6 months after the period of time that was determined for the direct workers.

if a manpower worker was eligible for allocations to the trust fund at a previous job and was transferred to another job that the employer is also committed to allocate to the trust fund, the manpower company will continue to allocate to the trust fund without a waiting period. The money will be allocated to the same fund as before, but the worker may ask he company, in writing, to shift his allocations and the money that was accumulated to the same fund that all workers of the company have.