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Suspension of payments to pension funds will not cause members loss – Matolcsy

A government decision to suspend state payments to private pension funds will not cause fund members any losses, National Economy Minister György Matolcsy said on Thursday.

Prime Minister Viktor Orbán said on Wednesday payments to the funds would be suspended from November 1, 2010 until the end of 2011.

Suspending the payments will free up HUF 30 billion a month which the government will use to the meet the 3.8%-of-GDP deficit target in 2010 and carry out reforms aimed at supporting economic policy breakthroughs, he added.

The private pension fund system has operated in Hungary for twelve years, but the government is not satisfied with it and must consider its future, Matolcsy said. The government is reviewing the possibility of allowing private pension fund members to return to the state pension system, he added.

Everybody has the right to chose membership in a state or a private pension fund, but money paid into the state fund is more secure, he said. (MTI-Econews)