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Financial market watchdog establishes special team for private pension funds

Hungary's financial market regulator PSZAF has set up a special team to follow the changes taking place in the private pension fund sector, PSZAF's 2010 annual report to parliament revealed.

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 pillar. About 97% of private pension fund members decided to return to the state pillar. These Hungarians will get any yield on their assets over the rate of inflation.

PSZAF said last Tuesday that 18 private pension funds transferred HUF 2,946 billion of assets belonging to members returning to the state pension pillar to the recently established Pension Reform and Debt Reduction Fund by June 10, before the June 12 deadline.

PSZAF said in the annual report it considered the monitoring of the fund liquidity and oversight of settlement with former members to be priority tasks.

To meet the above tasks, PSZAF has ordered the funds to provide data on a weekly and monthly basis. It asked the funds to submit monthly data on their operational and liquidity reserves at the end of 2010.

It has also set up a special team to continually watch developments related to the sector, analyse the possible effects on the market and, if necessary, propose measures to be taken with regard to the funds.

Having transferred the assets, funds now must calculate the real yields and other dues to be paid to former fund members. The funds may request payment of these from AKK by July 20. The transfer to former members' individual accounts must take place by August 31 at the latest.

In addition to settlements with former members, the funds must also assess their future operational prospects with reduced membership and, if needed, decide on their eventual wind-up.