Minister submits amendment to allow private pension fund members to return to state pension fund

National Economy Minister Gyorgy Matolcsy has submitted an amendment proposal to the financial stability act that will make it possible for private pension fund members to return to the state pension fund.

According to the proposed amendment, private pension funds will transfer the value of the claim of returning members, reduced by their membership fee, to the Pension Reform and Debt Reduction Fund. The private pension funds may also deduct the costs incurred by the termination of the membership, at a maximum of 0.001pc of the member’s claim.

Returning members’ accumulated membership fees must be paid to members or transferred to a voluntary pension fund or the social security pension system according to the returning member’s choice.

Mr Matolcsy announced on December 15 that private pension fund payments would be redirected to the state as one of the sources of the HUF 320bn needed for the 2012 budget due to lower-than-expected economic growth and forint rates, adding that the new payments would probably have to be rechannelled in 2013 as well and the future of the system would have to be reconsidered and could involve giving members another chance to join the state pillar.

Also on December 15, Parliament’s budget committee submitted an amendment to the financial stability act, proposing that pension contributions can only be transferred to the state Pension Insurance Fund.