Hungary's 18 private pension funds have transferred HUF 2,946 billion in assets of members returning to the state pension scheme, financial market regulator PSzÁF said in a statement on Tuesday.
All of the assets of the members were transferred to the recently established Pension Reform and Debt Reduction Fund by June 10, before the June 12 deadline, PSzÁF said.
Hungarian private pension fund members had until the end of January to opt out of a move, together with their pension assets, to the state pension scheme. About 97% of private pension fund members decided to return to the state scheme. These Hungarians will get any yield on their assets over the rate of inflation.
The effective deadline for the assets transfer was June 14, as June 12 and 13 were market holidays, PSzÁF said earlier.
The assets included about HUF 140 billion in cash, PSzÁF said. The funds had to transfer the yield accrued on the cash part of the assets between the May 31 evaluation day and the actual transfer to the government debt management agency ÁKK, which manages the Pension Reform and Debt Reduction Fund, as well, it added.
The funds carried out all of the transfer of securities between June 6 and June 10, and they transferred all of the cash between June 8 and June 10, with the exception of one fund which transferred about HUF 3 billion in cash on June 14, PSzÁF said.
Funds now must calculate the real yields and other dues to be paid former fund members. The funds may request payment of these from ÁKK by July 20.
The cash part of the transfer will most likely be insufficient to cover the real yields and membership fee supplements due to former pension fund members, Econews calculated. The pension fund association Stabilitás put the real yield and membership fee supplements due to former members at HUF 260 billion on June 2, while the National Bank of Hungary estimated their value, based on preliminary financial account data, at HUF 210 billion.
If the Pension Reform and Debt Reduction Fund does not have enough cash, legislation allows ÁKK to cover the transfer of the real yields with a bridging loan from the Unified Account of the Treasury.
The Pension Reform and Debt Reduction Fund will have two days to initiate the transfer of the real yields back to the pension funds after having been notified, and the private pension funds have another eight days from the crediting of their accounts to transfer the sum individually on former members accounts under a recent government decree. The transfer to former members' individual accounts must take place by August 31 at the latest.
Any yield accrued between the valuation date of the assets and the transfer has been payable to the state pension system and will be added to yet to be created individual accounts, the regulator noted.
PSzÁF said it would launch the second phase of its investigation of the transfer and focus on whether funds abided by rules during the transaction.