MNBʼs Windisch urges pension funds to buy more stocks
Tamás Kovács / MTI
It would be useful if voluntary pension funds took a bigger role in developing the economy and expanding GDP and would keep more, mainly domestic, stocks, in their portfolios, László Windisch, deputy governor of the National Bank of Hungary (MNB), said on Thursday at a conference of the National Association of Voluntary Pension Funds (ÖPOSZ).
László Windisch (photo: Tamás Kovács / MTI)
Windisch said the share of domestic stocks in voluntary funds is extremely low, at around 3.4%, and the total share of stocks also stands at only 5.8%. He noted that the share of government bonds in pension fund portfolios is 58%, and as high as 70% when adding bond funds.
In EU and EEA countries, by comparison, the share of government bonds in pension portfolios is only 30% and the share of stocks is 32%, Windisch noted.
The deputy governor argued for partially overhauling regulations and establishing a guarantee fund for pension funds to secure membersʼ savings. The MNB proposes offering guarantees to individual members of up to HUF 30 million of their savings, he added.
The central bank is also suggesting that voluntary funds divide their members into separate portfolios based on their age, like private pension funds, and put younger members in funds with higher risks. The supervisory arm of the MNB will monitor pension fundsʼ investment activities daily from next year, Windisch added.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.