Hungary records 30% annual pensions growth
Budapest-based Consultancy firm FI-AD Financial Advisory Ltd has published its report on institutional savings in Hungary for the fourth quarter of 2003. The figures relate to the asset managers providing data for the FI-AD Register, which, according to FI-AD, represents over 80% of the market.
The report shows that pension funds accounted for HUF935.7bn, or 48.3%, of total assets under management in Hungary. The figure was over 30% higher than the figure a year earlier. “I expect this figure to increase by a further 30% this year,” says István Farkas, partner at FI-AD.
Farkas explains that the increase was due to an increase in contributions to the voluntary additional state pension scheme that was introduced in 1993. Contributions increased from 6% to 7% of salary last year and will increase to 8% this year. Another reason for the increase is that members have to contribute for at least ten years in order to be able to draw a pension, so the scheme has not paid out yet. The third reason is gains from the invested contributions.
Hungary’s five largest asset managers which account for around two thirds of total assets managed account for a similar proportion of total pension funds in asset management.
Assets under custody totalled HUF2,049.4bn at the end of last year. Of this figure pension funds accounted for HUF735.9bn, or nearly 38% of assets under custody, of which the five largest custodians accounted for over 90%.