Market regulator asks private pension funds to limit administrative costs on returned yields

EU

Hungarian financial-market regulator PSZAF on Thursday called upon Hungary's 18 private pension funds to charge minimal administrative fees on their transfer of real yields and extra contributions to former members, and to report the steps they made to minimize these fees.

The private pension-funds have until August 31 to transfer the real yield and extra contributions to former members, who were automatically moved to the state pension system after not indicating their desire to remain in the funds by the January 31 deadline stipulated in a recent restructuring of Hungary's pension system.

Of the 3,020,778 former private pension fund members, 2,450,090 will receive an average of HUF 76,030 as real yields and refunded extra contribution, the government's pension protection commissioner Gabriella Selmeczi said late July.

PSZAF noted on Thursday that a government decree regulating the process of the transfer allowed the funds to charge former members the banking and postal fees on the refund of real yields and extra contributions, making it the funds' choice to determine the size of these fees.

PSZAF also announced it will evaluate the private pension funds' pricing practice related to fees charged on the yield transfer, and asked them to provide the authority with information by September 15 on the steps they had taken to minimize these charges.

Hungarian pension-fund association Stabilitas reported in July that there 99,620 people remained private pension fund members. Private pension fund membership was mandatory for those entering the labor market beginning in 1998, and part of employees' compulsory pension contribution went as membership fee into the private funds. Now all the 10% employee pension contribution of those who opted to stay private pension fund members will go to the private funds, but they will no more receive a state pension after the 24% contributions their employers will continue to pay on them to the state pension system.

ADVERTISEMENT

European e-commerce soars during pandemic - study Analysis

European e-commerce soars during pandemic - study

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Duncan Graham reelected as BCCH president Appointments

Duncan Graham reelected as BCCH president

Budapest launches revamped coupon card for visitors City

Budapest launches revamped coupon card for visitors

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.