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Constitutional Court held first pension fund hearing three weeks ago

Hungary's Constitutional Court held the first hearing in a case on the transfer of private pension fund assets to the state three weeks ago, Julianna Bába, who heads pension fund association Stabilitás, said on Thursday.

The main aim of the hearing was "orientation", Bába said. Károly Szász, the head of financial market regulator PSzÁF; Jószef Mészaros, the director of the National Pension Payer; and György Surányi, a former central bank governor, participated at the hearing, she added.

The court did not focus on legal content, but attempted to find out whether Hungary was in a state of economic emergency, she 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 pillar. About 97% of private pension fund members decided to return to the state pillar and there assets were transferred to the state by June 10. Those who returned will get any yield on their assets over the rate of inflation.

Bába conceded that it would be difficult to re-establish private pension fund membership after the real yields are paid out. It would have been most fortunate if the court could have taken a decision before the pension assets were transferred, she said.