Parliament approved late on Monday a declaration guaranteeing the "protection of mandatory private pension fund members".
The declaration, by Prime Minister Viktor Orbán, MP Lajos Kósa and government pension protection commissioner Gabriella Selmeczi was approved with 261 ayes, 51 nays and 43 abstentions.
In the interest of ensuring the security of the pension savings of Hungary's almost 3 million mandatory private pension fund members, guarantees must be made that an institution with individual accounts will be established for private pension fund members that return to the state system, that payments made into these accounts maintain their value, that losses of members returning to the state pension pillar be compensated, and that yields on the assets brought by private pension fund members returning to the state pillar by January 31, 2011 be tax free, according to the declaration. The circumstances of the management of private pension fund members' payments must be reviewed, it adds.
Parliament earlier approved legislation that effectively eliminates a pillar from Hungary's three-pillar pension system. The legislation gives members of mandatory private pension funds until January 31, 2011 to opt out of a transfer of their pension savings to the state pillar. Member who decide to stay in the funds will lose all future contributions to the state pension system by their employers. (MTI-ECONEWS)