HUNGARY - The Hungarian pension fund supervisor PSZAF has criticised four private pension funds for making indirect investments which may have resulted in lower returns for members.

In four separate statements issued between end-2010 and April 2011, the PSZAF called on the pension funds run by OTP, ING, AXA and AEGON to quantify the investment costs and refund them to members.

A spokesman for PSZAF told IPE: “We found that the four private pension funds have made indirect investments without proper justification, thereby generating significant additional expenses, [which] might reduce net yield to members.”

However, in a statement, the accused OTP Pension Fund said it had “disputed the PSZAF’s resolution from the beginning”.

“The pension fund turned to the court for review of the unfounded remarks and decisions of the resolution - a legally binding decision has not yet been made,” the OTP said.

The statement added that until the court had reached a verdict, OTP did not wish to comment further.
A spokesperson for ING Pension Fund in Hungary also confirmed to IPE that legal proceedings were ongoing  regarding the regulator’s decision. She stressed that there was “currently no obligation for ING to pay [back] anything to its members”.

The OTP pension fundalso said that in 2010, the year under review, it reported “an outstanding return on investment, not least because of the use of indirect investment instruments now examined by [PSZAF]”.

Similarly, the spokesperson for ING Pension Fund said that it had been able to “realise substantial real yield” and that further details on performance would be available in three weeks.

The spokesperson noted that the ING Pension Fund “has always acted and will always act in the best interests of its members and in compliance with the legal requirements”.

OTP said that over the 13 years since its inception the fund had always co-operated with the supervisory authorities and that “all these permanent inspections have ended with satisfactory results so far”.

A spokesperson for AEGON told IPE that the company “accepted the PSZAF statement and already repaid the amount in question to its members”. The ruling “affected 0.03% of the assets”, she added.

The AXA pension scheme did not respond to questions by time of publication.