Voluntary pension contributions on rise in Hungary, Ukraine
EUROPE – Hungarian and Ukrainian pension funds recorded an increase in voluntary pension contributions, while in Estonia willingness to make extra savings seems to have waned.
According to Hungarian pension fund association Stabilitas, voluntary pension funds increased their assets by around 14% year on year to HUF866bn (€3bn), as of the end of March.
The Hungarian second pillar, on the other hand, is still losing money after assets were effectively nationalised last year.
Assets in private pension funds fell by around 20% year on year to HUF183bn at the end of the first quarter.
In the Ukraine, the number of people voluntarily contributing to the supplementary pension system has now reached the 10,000 mark, according to Valentyna Nykytenko, deputy head of the pension fund board.
In October 2011, a new law had come into effect introducing a mandatory second pillar to the system, with assets going into an ‘accumulation fund’, while in April the law on voluntary contributions was amended.
Ukrainians living abroad can now also pay into the pension funds to increase savings for their retirement.
Meanwhile, figures revealed by the Estonian tax board show contributions to the third pillar continued to fall for the fourth year in a row.
Annual voluntary contributions dropped by around €1m to €29m year on year.
Analysts put this down to a cap on reclaimable contributions introduced by the government in the wake of the financial crisis.
The Estonian government drew fire in 2011 for a new investment law for second-pillar funds.
Meanwhile, the Latvian government is under increasing pressure to resume pension indexing from October.
The indexation of first-pillar state pensions had been halted in the wake of the financial crisis and might continue, as some state-owned companies are still facing financial trouble.
However, last year, the government felt the budget was strong enough to increase contributions to the second pillar.