Laws to cut private pensions, control city debt

Deals

Parliament yesterday adopted legislation, based on the 2015 budget act, to set new conditions on pension funds and restrict municipally-owned companies from taking on debt, as well as other measures, MTI news agency reported.

The approved bill will amend over 100 pieces of legislation. As of January 31, the so-called Pension Reform and Debt Reduction Fund, which was almost entirely depleted by the end of 2013, will be eliminated. The fund was created from more than HUF 2.9 trillion in assets the state had taken over from private pension funds in 2011.

The new act will force private pension funds issuers who fail to collect dues from at least 70% of members during any two months in the preceding six-month period to wind up the funds. The new rule will apply as of next September 30. Members will have the option to return to the state pay-as-you-go system or to join another private pension fund. Fully-municipally owned businesses will be able to take on debt only with the permission of the government from January 1, 2015 according to the approved legislation.

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