Membership boom at Hungary's private pension funds
Voluntary pension funds experience a boom of new members since the reorganization of the private pension fund system in Hungary. However, the overall number of funds still drops slightly.
Voluntary private pension funds experience a dramatic surge in the number of new customers since the reshaping of the Hungarian private pension fund system. In some cases the number of new customers in Q1 2011 reached the number of new customers for the entire year in 2010. However, the number of customers skipping private pension funds is also on the rise.
The number of people with new accounts at OTP's voluntary pension fund has doubled during the time of the reorganization of the private pension fund system in Hungary, Anikó Várnagy, vice president of the fund said.
In the first month of 2011, nearly 900 people joined the fund, compared to about 400 in the same period of 2010.
Meanwhile, the number of new customers at the OTP voluntary pension fund rose 80% (from 1,700 to 3,100) in the first quarter of 2011 on a year-on-year basis.
Other market players experienced a similar trend.
At the private pension fund of MKB the number of new customers in Q1 2011 was already nearly as many as in the entire year of 2010, László Lehoczky, head of the fund said.
In the first three months of 2011 the number of new members at Aranykor voluntary private pension fund increased 66% compared to the same period of 2010.
ING, another voluntary pension fund, was also doing well. The number of customers grew over 2,800 in Q1 2011, and the growth still continues. In the first two months of Q2 2011, the number of members rose 2,560. Both the number of members and the assets grew more dynamically compared to previous years.
Smaller market players also benefit from growth. The number of customers at Tradíció rose 11%, managing director of Patika Group highlighted.
However, the situation may not be as favorable as it seems at first glance. Both OTP and MKB highlighted that despite the rocketing number of new customer, the overall number of members still drops. At OTP the total number of customers fell 1,500, while at Aranykor it dropped 1% even despite a boom in new customers.
But this drop is natural, says Szilvia Szimicsku deputy managing director of Aranykor fund, as assets at voluntary pension funds are accessible before the end of the 10 years saving period.
She added that another contributing factor to the drop is that an increasing number of members reach retirement age and therefore gain tax free access to their savings.
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