Hungary’s govt vows to uphold pensions value – spokes

Budapest, February 3 (MTI) – The value of pensions will be preserved, and a reformed pension fund will be set up as quickly as possible, the prime minister’s spokesman said on Thursday.

Peter Szijjarto said reducing the value of pension payments was “out of the question”.

    ”We will preserve the value of pensions,” he said.

    Szijjarto said the new fund would be transparent and only deal with pensions rather than welfare and other kinds of payment, too. The Economy Ministry’s model will be ready for parliamentary debate by the middle of the month, he added.

    Constitutional guarantees to pensioners will also be put in place, he said.

    Prime Minister Viktor Orban told a news conference on Wednesday that the pension system had been on the brink of collapse.

    At the end of January almost all holders of mandatory private pensions returned to the state fund.

    The main opposition Socialist party accused the government of “forcing” pension savers to return to the state-run system in order to “finance its spendthrift economic policy”.

     Orban said the changes in the state pension system to enable savings tracked in individual accounts would be in place by the end of 2011 and the pension fund would be brought to balance by the end of the year.

    The long-term solution to sustaining the pension system, however, hinged on raising employment and improving the country’s demographics, he said.

    Some 3,000 billion forints (EUR 10.9bn) of assets in pension savings are expected to be transferred to the state pension fund as of March 1, which is a major tranche of the government’s aim to improve the country’s fiscal balance.