Mor Gemel Pensia: Can Pension Really Cross Into Profit In 2027
Mor’s pension business already has scale, with NIS 16.4 billion of AUM at the end of 2025 and NIS 18.1 billion by March 10, 2026. The real question is no longer growth itself, but whether that growth can outrun fee pressure, high acquisition intensity, and a delayed operating transition quickly enough to make 2027 a real profit year.
The Open Question Left By The Main Article
The main article already established that the engine carrying Mor Gemel Pensia today is gemel. This follow-up isolates only the pension question: after 2025, is there enough scale here to cross into profit in 2027, or is the company still buying growth at a price that keeps pushing breakeven out?
What is working is clear. Pension assets under management reached NIS 16.4 billion at the end of 2025, up from NIS 9.6 billion a year earlier, and by March 10, 2026 they were already at NIS 18.1 billion. The number of pension accounts also rose from 67.8 thousand to 128.4 thousand in a single year. This is no longer an experiment. There is real mass here.
But the 2027 question does not start with assets. It starts with economics per unit of assets. More than 95% of pension AUM still sits in the comprehensive fund, where pricing is structurally tighter because of the selected default-fund framework. At the same time, average asset-based fees are still falling, annual pension commissions remain high, and the operating transition has been delayed by 2 to 4 quarters. That is exactly why the 2027 target looks possible, but far from automatic.
| Metric | 2024 | 2025 | Why It Matters |
|---|---|---|---|
| Pension AUM at year-end | NIS 9.6 billion | NIS 16.4 billion | Scale has already moved into a range that should start absorbing fixed cost |
| Pension accounts | 67.8 thousand | 128.4 thousand | The client base almost doubled, and so did the service load |
| Average asset-based fee, comprehensive fund | 0.21% | 0.19% | Pricing on the core book is still compressing |
| Average asset-based fee, general fund | 0.21% | 0.18% | Even the smaller complementary product does not offer pricing relief |
| Direct channel share in pension | 21% | 26% | This is the cleanest positive sign on acquisition economics |
| Annual pension commissions | NIS 39.7 million | NIS 43.7 million | Growth is still being bought at a high cost |
What 2025 Already Proved
The first thing that is no longer open for debate is demand. In 2025 the company’s pension funds took in NIS 1.7 billion of deposits, generated NIS 3.3 billion of net transfers from competitors, and saw only NIS 144 million of withdrawals. Together with investment returns and other movements, that was enough to move pension AUM from NIS 9.6 billion to NIS 16.4 billion in one year. When growth comes from both deposits and transfers, that points to distribution strength, not just a rising market.
The number that may matter most for the 2027 debate is actually March 10, 2026. Less than three months after year-end, pension AUM had already reached NIS 18.1 billion. In other words, the growth did not stall after the year closed. The debate is no longer whether pension can keep growing. It is whether it can grow fast enough to absorb itself.
But this is where the second and less comfortable point comes in. At the end of 2025, out of NIS 16.4 billion of pension AUM, about NIS 15.6 billion sat in the comprehensive fund and only about NIS 812 million sat in the general fund. Put differently, more than 95% of the pension platform still sits in the product where pricing pressure is most visible. The company benefits from selected default-fund status through October 2028, but that same growth engine comes with a relatively low price ceiling: for new members joining the comprehensive fund under the tender framework, fees cannot exceed 0.22% of assets and 1% of contributions for ten years from joining.
That is a crucial point because it almost completely rules out a profit rescue through product mix. If 2027 is going to be the year pension turns profitable, it will have to come almost entirely from operating leverage and lower acquisition intensity, not from shifting toward a richer-fee product.
Where Profitability Still Gets Stuck
The first bottleneck is price. In the comprehensive fund, the average asset-based management fee for active and inactive members fell from 0.22% in 2023 to 0.21% in 2024 and 0.19% in 2025. In the general fund, the same pattern showed up, from 0.22% to 0.21% and then 0.18%. Contribution-based fees stayed flat at 1%, and that matters: at this stage of growth, pension still benefits from a heavy flow of new joiners and new contributions. But as the book matures, the economic weight shifts more toward asset-based fees, and that is exactly where the pressure is.
That is one of the easiest things to miss on a quick read. In 2025 management fees collected in pension products almost doubled, from NIS 23.1 million to about NIS 41.7 million. That looks excellent. But the increase came first and foremost from a sharp increase in assets and members, not from stronger pricing. Volume is doing all the work. Price is not helping.
The second bottleneck is acquisition cost. There is one real improvement here: the direct channel’s share of pension AUM rose to 26% from 21%, while the agents channel fell to 74% from 79%. That is not cosmetic. Every percentage point moving toward direct distribution is a potential economic improvement because it reduces dependence on external distribution commissions.
But the 2025 numbers still say the transition is incomplete. Annual pension commissions rose to NIS 43.7 million from NIS 39.7 million in 2024. The report itself makes clear that this table does not reflect the annual accounting expense, because acquisition cost is spread over time. Even so, the message is straightforward: in annual commission terms, the pension engine is still consuming almost all of the fees it generates. This is not an accounting accusation. It is an argument about the quality of growth.
That leads to a simple conclusion: 2027 does not depend only on more assets. It depends on cheaper assets to gather and serve. If the direct channel keeps rising, and if commissions per new shekel of pension AUM start to fall, the path to profit looks more credible. If not, even NIS 20 billion of pension AUM may not solve the problem.
The Operating Transition Delay Narrows The Margin For Error
The third bottleneck is operational. In September 2024 the company signed an amendment to its operating agreement, which took effect at the start of 2025. The amendment did two important things. First, operating fees were supposed to stand at about NIS 27.5 million per year including VAT, rather than being directly derived from AUM as before. Second, from July 1, 2026 the operator was supposed to start providing the full pension operating service stack.
Those are good developments, at least on paper. If AUM keeps growing while the operating-cost base does not move with it in the same way, real operating leverage starts to show up. But there is also a material caveat: the operator retains the ability to reduce the discount if its expected profitability is impaired. So even in the contract that is supposed to improve economics, part of the expected benefit can reopen if the original assumptions do not hold.
In October 2025 the company agreed to the operator’s request to delay the start of pension operating services by 2 to 4 quarters beyond July 2026, because the operator entered new projects with other institutions. The company says a credit mechanism was agreed for the delay period and therefore no effect is expected on its forecast 2026 financial results. That matters. But it does not remove the broader analytical point: the period in which the new operating model is supposed to prove itself before the 2027 target year has become shorter.
That matters especially because the company itself ties its 2026 guidance to this operating amendment. The 2026 adjusted pretax profit guidance of NIS 140 million to NIS 160 million rests partly on lower operating expense. And on that same set of assumptions, the company says the pension segment is expected to cross into adjusted pretax profit during 2027. So even if 2026 is partly protected by the credit mechanism, 2027 now rests on less room for execution slippage.
Reinsurance Is Not The Main Profit Lever
The fourth bottleneck, or at least a source of possible confusion, sits in reinsurance. In 2025 the company operated with 72% reinsurance coverage in the comprehensive fund and 95% in the general fund. At the end of 2025 it ended reinsurance in the comprehensive fund, while the general fund kept the 95% coverage. In February 2026 it added catastrophe insurance for the comprehensive fund, providing NIS 500 million of coverage above a NIS 25 million retention, excluding war events.
It is very easy to take those numbers and build a profitability story around them. That would be a mistake. The company explicitly explains that the management company’s profitability in pension comes from the gap between management fees and operating, marketing, and selling costs. Claims paid by the fund, including pension benefits, do not directly affect the management company’s profitability because the insurance structure is mutual and members bear the claims risk.
That means reinsurance matters, but mainly as a risk-management, demographic, and tail-event tool. It is not the core lever that determines whether pension crosses into profit in 2027. Anyone looking for the profit bridge inside the reinsurance change is looking in the wrong place. The real bridge remains commercial and operational: pricing, acquisition cost, and service cost.
So Is 2027 Realistic
The short answer is yes, but with clear conditions and a much narrower margin for error than the growth headline alone suggests. The supportive side is obvious: there is already scale, growth continued after year-end, the company says it does not expect to need further material investment in the pension segment, and the direct channel is finally beginning to gain share.
The side weighing against the thesis is just as clear. More than 95% of pension AUM still sits in the comprehensive fund, meaning the business remains anchored in the product where pricing pressure is most structural. Asset-based fees are still declining. Annual commissions have not started to fall, despite the improvement in direct distribution. And the operating transition that was supposed to help pension specifically has been delayed.
So the right way to read 2027 is not as a breakout year, but as a proof year. For that target to look credible over the next 2 to 4 quarters, three things have to happen together. First, pension AUM has to keep growing without another leg down in asset-based fees. Second, the direct channel has to keep rising or at least materially reduce commission intensity per new shekel. Third, operating savings have to start showing up in practice, even if the formal transition start was delayed.
If those three things happen, 2027 looks like a reasonable target. If one of them breaks, the target can slip even without business drama and even without a growth slowdown. In Mor’s pension business, the question is no longer whether demand exists. The question is whether that demand is starting to turn into economics that stand on their own.
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