MNB fines pension fund execs for violations

Image by Jessica Fejos

The National Bank of Hungary (MNB) on Thursday said it initiated the dismissal of the managing director and the chairman of the board of Pannonia Pension Fund and levied personal fines of a combined HUF 59 million on them and another 13 current and former pension fund executives over property transactions causing financial disadvantage to fund members, state news wire MTI reports.

MNB revealed in a target audit that, as a result of the decisions of Pannonia's governing bodies, several persons, including fund managers, as well as some stakeholders related to managers or the fund, received discounted home purchase options in connection with a property development of the fund, thus reducing the yield potential of members' individual accounts.

The property development was registered by Pannonia in the coverage reserve containing the savings of fund members, so the unjustified discounts reduced the yields of members' savings.

MNB noted that the violations revealed did not affect the long-term reliable and stable operation of the fund.

In response to the resolution of the MNB, Pannónia Pension Fund said it disputes the decision and is considering the possibility of a legal remedy.

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