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Szebelédi Ferenc: Some challenges of the Hungarian pension system in the EU . Sofia, 16-17 February, 2005. 1. Structure of the Hungarian pension system. 2. Pillar I. issues. Traditional PAYG social security system 1408/71 Reg Calculation rules (pro rata and theoretical benefits)
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Szebelédi Ferenc:Some challenges of the Hungarian pension system in the EU Sofia, 16-17 February, 2005
2. Pillar I. issues Traditional PAYG social security system 1408/71 Reg • Calculation rules (pro rata and theoretical benefits) • Coordination and clearing rules →Little experience, seems not to have serious problems
3. Pillar II: Mandatory pension funds Under the scope of Reg. 1408/71 (which has PAYG logic) Main challenges: • Theoretical benefits → funded systems are not able to manage theoretical benefits 2) Coordination among state competent institutions, clearing systems → pension funds are private insitutions: coordination mechanism and clearing system are not applicable
4. Pillar III.: voluntary schemes Voluntary individual pension funds „Önkéntes nyugdíjpénztár” Under of scope 1998/49 Dir →Seems not to have major problems
5. Occupational schemes:Challenges regarding the 2003/41 Dir. – 1. 41/2003. Dir is applied for occupational pension schemes - Home state: - rules for the activies of IORPs - supervision - Host state: - make it possible to pay contribution to an IORP - giving information about social and labour law - limited supervision
6. Occupational schemes:Challenges regarding the 2003/41 Dir - 2. Hungary as Home state: → It seems, that Hungary has no occupational schemes, so there is no need to deal with regulation for IORPs
7. Occupational schemes:Challenges regarding the 2003/41 Dir - 3. Hungary as host state: • Have to make it possible for Hungarian undertakings to sponsor IORP – possible tax problems • Have to determine Hungarian social and labour law relevant to occupational pension – Hungary has no specific regulations • Investment rules, other options – seems not to have any problem • Have to determine procedure for the notification process – task of CEIOPS WGOP
Conclusions • Pillar I. Little experience, no serious problems • Pillar II. No experience at all, major challenges: - theoretical benefits - coordination and clearing system among competent institutions • Pillar III: Seems not to have major problems • Occupational pensions: difficulties because of the lack of occupational pillar
Conclusions – 2. →Mentioned challenges are not only the problems of Hungary →EU regulations and directives do not cover all existing pensions schemes