The Government has approved the pension saving legislation

Created: 25th November, 2010 11:26 | Last updated: 25th November, 2010 11:41	print	send

Related:

A kormány elfogadta a nyugdíjmentő törvénycsomagot + Képgaléria

Mr. Péter Szijjártó - the spokesman for the Prime Minister - reminded: the uncertainty of the world economy and the financial crises of the recent years caused severe losses to the private pension funds, and to their members. Risking the member's money on a pension stock exchange is not acceptable - that's the reason of the actions of the Government. This is in everyone's interest.
All those who had real yield - they are the minority - will be able to keep their real yield in the state run pension system, and enjoy the stability guaranteed by the state. And all those who had losses during their private pension membership are going to be compensated by the state. The pension of the present pensioners are also safe because the Government declared that only pension related payment can be carried out from the national pension fund.

The incomes and the expenditures have to be in balance
The legislation was approved because there is a massive gap in the budget of 2011 caused by the state pension fund. While the pension expenditures are over 3000 billion HUF, the income is lower about 900 billion HUF - emphasized National Economy Minister György Matolcsy.

The incomes and the expenditures of the state pension found have to be in balance, as it is important that only pension related payments should be carried out from the national pension found and the pension contributions paid by employer (24%) and the employee (10%) will be separated and each Hungarian employee will be able to decide whether to stay in the private or to return to the state pension system.

Every private pension fund member has to make the decision until the end on January 2011. Who decides to return to the state system will bring his or her personal account and savings which means that there will be a personal pension account for everybody. The accounts are going to be subject of succession by the spouse. That private pension fund members whose savings had yield which was higher than the inflation can get their surplus in cash or they can move the money to a voluntary pension fund. According to the calculations the majority of the people had losses because of the mandatory private pension found system. If they decide to return to the state system they are going to be compensated. Everyone who returns to the state system will be a winner - said Mr. Matolcsy.

If till 31 January 2011. someone chooses one of the private pension founds he or she will not be a part of the state pension system based on solidarity. In their case their pension payment of the 14 months between 1 November 2010 and 31 December 2011. will be returned to their accounts but from that time the pension payments of the their employer (24%) will not arrive to their account - only their own pension payment (10%). This means that they will loose the 70% of their future pension. Furthermore the state will not guarantee the savings (10%) on the private pension fund account of the employee - explained Mr. Matolcsy. He added that the redirected money from the private pension funds will be used for the pension reform and lowering the public debt.

Mr. Matolcsy told also that the legislation will cut back the operating fee of the private pension found from the present 0,8 percent to 0,2 percent - which is equal to the Hungarian state run pension system and the Western-European standards. The minister announced that the Government will launch a comprehensive inquiry into the assets (estimated 2700 billion HUF) of the private pension founds.