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.