AMAN reviews a draft report on transparency in managing the investment of the Palestinian Pension Agency’s funds
Weakness in the transparency system in managing the fund and in its relationship with citizens
Ramallah – The Coalition for Integrity and Accountability (AMAN) held a discussion session to present the draft of its new report on transparency in managing the investment of the Palestinian Pension Agency’s funds. The participants were representatives from the Council of Ministers, various ministries, official institutions, the Palestine Monetary Authority, civil society, the media, and the Retirees’ Association. AMAN also invited the Palestinian Pension Agency and its Board of Directors, but they did not attend.
The Executive Director of AMAN, Issam Haj Hussein, stressed in his opening remarks that the report was prepared for the purpose of examining the extent of compliance with transparency standards in managing pension funds, which would lead to recommendations that would enhance the clarity of information and protect public funds. He noted that AMAN had to collect information from both international and local sources for the report due to the limited availability of published data on the Agency’s investments.
Sharp Decline in Disclosure and Publication
Researcher Ibrahim Rabay‘a presented a comprehensive overview of the draft report, explaining that the legal framework defines investment and its management mechanisms, and clearly states that investments are the amounts that the Agency instructs investment experts, or the Investment Manager in the current situation, to invest on behalf of employees in accordance with the applicable provisions and regulations. He explained that the investment structure consists of five bodies. Those are: three internal ones, the Board of Directors, the Oversight Committee, and the Investment Committee; and two external ones, the custodian and the external Investment Manager.
Mr. Rabay‘a emphasized that the Board of Directors holds primary responsibility for planning, decision-making, management, and accountability, while the Investment and Oversight Committees play central roles whose effectiveness requires careful evaluation throughout the report.
He also noted that the report’s framework relied on an analysis of the General Pension Law No. 7 of 2005, which established the Pension Agency, granted it financial and administrative independence, and defined the foundations of its management and investments. He clarified that this report is an extension of a 2017 study issued by the Coalition on the integrity and transparency environment within the Agency; a study which, at the time, concluded there were fundamental challenges in governance and weaknesses in disclosure and publication policies, many of which remain present in the current report.
Mr. Rabay‘a further stated that the Pension Agency is witnessing a troubling decline in disclosure since it has discontinued publishing its annual and quarterly reports years ago even though it is legally bound to do so. The names of Investment Managers, the mechanisms for their selection, and the basis for bonuses and commissions are also not disclosed, in addition to the absence of details on risk management strategies. He emphasized that the Agency’s website has not been updated regarding investments since 2014, and contains no information on related parties or the loans and facilities the Agency provides as part of its investment operations.
He also noted that the relationship between the Agency and the public has significantly deteriorated over the past years, as the Agency’s presence in the media has disappeared and it no longer provides statements or updates on its activities or investment results. Although the law guarantees subscribers the right to access their account data, bureaucratic procedures make obtaining it difficult, and the subscribers’ online portal is effectively inactive. Mr. Rabay‘a believes that the widening gap between the Agency and the public undermines general trust and prevents subscribers from being able to track the fate of their funds.
Gaps in Governance and Mechanisms to Prevent Conflicts of Interest
Mr. Rabay‘a also explained that, due to the scarcity of official data, a methodology was adopted combining a review of laws and regulations, an analysis of available open sources, and the use of media reports, official statements, and the World Bank’s 2023 report. He noted that this lack of information led to the development of a ‘verification matrix’ that tests indicators of transparency, governance, and disclosure in all matters related to the Agency’s investments, from organizational structures to external oversight.
During his presentation of that matrix, Mr. Rabay‘a said that the most prominent result was one that clearly showed the dominance of the red color (indicating severe weakness) across most evaluation elements, reflecting non-compliance or absence of implementation in key aspects of governance and disclosure. He clarified that the level of governance does not meet transparency requirements, and that the Agency does not publish data related to investment portfolios, their evaluation, or associated risks.
He also focused on the state of governance within the Pension Agency, explaining that the absence of a clear and publicly stated investment policy creates opportunities and risks of conflicts of interest and limits the Investment Committee’s ability to perform its duties. Although the Board of Directors includes experienced members, the report found insufficient measures to ensure that investments are protected from the influence of some members’ relationships with companies linked to the Agency. He pointed to the weak implementation of the Code of Conduct and the absence of approved disclosure forms for conflicts of interest on the Agency’s website or within its internal procedures, which is considered one of the most conspicuous flaws identified in the report.
Call for a Radical Reform to Protect Pension Funds
Mr. Rabay‘a concluded his presentation by emphasizing that addressing the reality of transparency within the Agency requires radical reform, starting with strengthening the independence of the Agency’s funds from the Treasury in the Ministry of Finance, and regulating the relationship between the two entities to prevent role overlaps and ensure the independence of investment decisions. He also called for adopting a clear and binding disclosure policy that includes annual reports, details of investments and risks, updating regulations related to investment management and conflicts of interest, and activating the subscribers’ portal to enable them to access data as the real owners of the pension funds.
Community Partnership to Ensure Transparency and Sustainability of the Pension System
Mr. Rabay‘a also stressed that enhancing transparency in managing pension funds a comprehensive partnership with the community, including making data available to researchers, journalists, and subscribers, and developing tools for community and official oversight. He affirmed that protecting these critical funds requires a transparent system that restores public trust in the Palestinian pension system and supports its sustainability and ability to meet its obligations to hundreds of thousands of current employees and future retirees.
The Need to Separate Oversight from Execution
Mr. Hussein Al-Abed from the Civil Retirees’ Association emphasized that there are a number of fundamental observations that warrant attention, indicating that the most prominent of these is the need for a complete separation between the oversight and executive roles within the Pension Agency. He explained that the Board of Directors serves as the oversight body over the executive management, while the Agency’s President functions as the executive authority. This aligns with governance principles that prevent oversight bodies from participating in executive work to avoid conflicts of interest, and he stressed the importance of clarifying and reinforcing this distinction within the Agency’s structure.
Ambiguity in the Availability of a General Investment Policy
Mr. Al-Abed noted that the recommendations in the report focused on providing financial data on a regular basis, highlighting that current indicators show a lack of clear financial information for subscribers and beneficiaries. He added that this gap underscores the urgent need to enhance transparency and adopt regular disclosure mechanisms that make information available to employees and retirees in a clear and accurate manner.
Regarding risk management, Mr. Al-Abed explained that there are clear indications that decisions are dominated by individuals, whether in investment or administrative matters, which severely undermines the accountability system. He also pointed out the absence of an Investment Committee, which should be responsible for setting general policies and the Agency’s investment framework, in addition to the confinement of investment activities to limited and narrow areas. He clarified that, ideally, the Agency’s investments should be more diversified and broad to ensure the best possible returns and reduce risks to subscribers’ funds.
The Audit Bureau: New Investment Audit Starting in 2026
Mr. Thalji Shuman from the Financial and Administrative Audit Bureau explained that the Bureau is proceeding according to its plan to follow up on the implementation of recommendations contained in a previous report it prepared on the Pension Agency, noting that at the beginning of 2026 a detailed audit of investments will be launched to assess compliance with best practices.
Mr. Shuman indicated that the Bureau conducted a comprehensive audit of the investment portfolio and applied its findings to the performance of the Pension Agency, resulting in a large set of observations related to the Board of Directors, investment mechanisms, and the levels of oversight within the Agency. He added that these results were included in the annual report and submitted to the competent authorities.
He concluded by emphasizing that the Audit Bureau will continue to follow up on the implementation of the recommendations during 2026, ensuring improved governance, enhanced transparency, and increased efficiency in the oversight and administrative management of pension funds.
The Pension Agency’s Precarious Position within the Palestinian Governance System
Dr. Azmi Shuaibi, Advisor to the Board of Directors of the Coalition for Integrity and Accountability (AMAN), emphasized that the recent report on transparency in managing the Pension Agency’s funds cannot be understood apart from the fundamental issue of the Agency’s position within the Palestinian governance system. He noted that the law defines it as an independent agency – an institution that manages people’s money free from the control of the executive authority. In practice, however, the opposite has occurred, further eroding public trust, similar to the Social Security Agency, which struggled at some point in the past because of the absence of public confidence in financial institutions.
He explained that part of this accumulated loss of trust stems from the Pension Agency’s own experience, as subscribers feel their funds are being used outside the scope of their direct interests. The government’s contribution to the Agency does not grant it control, because once these funds are transferred from the Ministry of Finance to the Agency, they become the property of the subscribers.
$4.2 Billion in Government Debt to the Pension Agency
Dr. Al-Shuaibi criticized the Agency’s handling of information, condemning the practice of withholding data and limiting the report’s delivery to the President without publishing it to the public as the law requires, and also noting the ineffectiveness of the community accountability system. He pointed out that centers of influence have begun using retirees’ funds to pursue private interests. He then added that there is a fundamental problem in the financial relationship between the government and the Agency, which he described as non-transparent and full of contradictions. Notably, AMAN’s investigation found that the accumulated government debt to the Pension Agency has reached $4.2 billion in favor of the employees subscribed to the fund, according to information collected by the Coalition from open sources.
