- Establishment of membership
- Pension scheme classification and payment obligations
- Parameters/rules of the pension scheme
- Member contributions
- Crediting rates on members’ accounts
- Termination of membership
- Settlements of members’ account and their fees
After the employer has joined the IORP, memberships in the retirement program can be established by making the necessary amendments in the employment contracts of the employees to be involved in the program – without the need of the employee’s any additional separate declaration (e.g. entry form). The employer forwards the information to QUAESTOR Foglalkoztatói Nyugdíjszolgálató Zrt. and the Fund opens the accounts for the members.
The IORP is entitled to make a single deduction of 4,000 HUF (in case of EUR based pension scheme 13 EUR), as an entry fee, after the establishment of the membership. This amount is deducted from the first regular employer contributions and additional member contributions arriving on the member’s account. This amount is credited to the operating reserve of the IORP.
Upon the employer’s decision, the employee is ranked into one (or more) of the pension schemes the employer has created, and defines the frequency of regular employer contribution payments (monthly, or quarterly), besides the amount of these contributions.
The rates (or amounts) of employer contributions have to be entered into the employee’s employment contract.
The employer can decide to make the employer contributions subject to regular member contributions (matching contribution system), paid by the employees. In this case, the employer performs the payment of employer contributions only if the employee makes his additional contributions at the same time.
The main parameters of the pension scheme are defined by the accessing employer in accordance with the Organizational and Operational Rules of QUAESTOR Foglalkoztató Nyugdíjszolgáltató Zrt.
In case the employer constructed the pension scheme according to the Basic Package, the following rules have to be applied for the members:
- Contributions must be paid in Hungarian Forints.
- The waiting period is 10 years, which means that the employee must maintain the membership for at least 10 years to be entitled for the retirement benefit.
- There is no determined vesting period, which means that the regular employer contributions – decreased by the operating cost of the IORP – are immediately vested by the member and the employer cannot have a claim for these payments in case of termination of employment.
- The employee cannot choose from investment portfolios – all contributions are put into the Consistent portfolio.
- The employee is not obliged to pay additional member contributions to receive the employer contributions.
- The form of retirement benefit is a fixed-term annuity payment.
However, the employer may choose to establish a completely different pension scheme, based on unique rules, not according to the Basic package.
Please ask for further information and conditions of your pension scheme from your employer!
The following possibilities are available for the employer to construct the pension scheme:
- Both EUR and HUF based pension schemes are allowed to be created.
- The employer can define a shorter waiting period (5, 6, 7, 8, or 9 years), which means that a shorter period of membership is enough to require the retirement benefits.
- The employer can define a vesting period (1, 2, 3, 4, or 5 years), which means that the regular employer contributions paid by the employer will become vested by the member after the defined period. In case the member’s employment terminates during the vesting period, the accumulated regular employer contributions and their yields shall be credited to the individual accounts of all other fund members having fund memberships in the same pension scheme, according to the actual balances of member’s accounts.
- Upon the employer’s decision, the Consistent portfolio is chosen.
- Upon the employer’s decision, the Equalizer portfolio is chosen.
- The employer may decide to offer the employees the possibility of choosing from different investment portfolios.
- Upon the employer’s decision, the form of retirement benefit is annuity payment.
- Upon the employer’s decision, the form of retirement benefit is one lump-sum payment.
- The form of retirement benefit can be chosen by the member (one lump-sum payment, or annuity).
The Conservative Portfolio (HUF or EUR based) – primarily a short-term financial market portfolio, which provides sufficient liquidity and low risk.
The Consistent Portfolio (HUF or EUR based) – a mid-term mixed investment portfolio, which provides sufficient yield possibilities at moderate risks.
The Dynamic Portfolio (HUF or EUR based) – a long-term, dynamic portfolio, which provides the highest yield possible at acceptable risks. During the management of this portfolio, the IORP strives to maximize the yield in the long term. Making derivatives and repo transactions in the Dynamic Portfolio is permitted according to present regulations
The Equalizer Portfolio (HUF or EUR based) – a capital protected portfolio, with investments mainly into short-term government securities and bank deposits, and assets that have the ability to produce high yields at high risks to a lesser extent. At the same time, this portfolio is something more than a simple capital protected portfolio, since it also includes a so-called equalizer mechanism, which provides the following advantages: should some capital loss arise in the investment of the member’s account compared to the opening balance and the amount of contributions paid and credited to member’s account, the IORP “equalizes” the arisen loss in the following 5 years by not enforcing the operating cost deductions from the occupational and additional member contributions. The members are entitled for the right to use equalizing, if no withdrawal takes place in their accounts until 31st December of the given year.
(a) It is considered a portfolio selection, if the member is entitled to choose between different portfolios and if he/she exercises this right by making a declaration with the form and content required until the last calendar day of the third month following the creation of membership. The portfolio selection is free of charge.
(b) Every statement about the amendment of portfolio classification, which is not about portfolio selection, is considered a portfolio change. The cost of portfolio change is one thousandth of the account receivables, but cannot be more than 4,000 HUF(or the equivalent amount in EUR). At least half a year must elapse between two portfolio changes.
(c) In case the member wishes to change the portfolio classification to Conservative, Consistent, or Dynamic in the portfolio change declaration and designates a later date than 8 working days after the modification is received by the IORP, the date of portfolio change will be the designated day. In all other cases the portfolio change is executed within 8 working days after receipt of declaration. At least half a year must elapse between two portfolio changes.
(d) Employees with newly established membership can choose to be classified in the Equalizer portfolio. If the member designates a later date than 8 working days after the portfolio change declaration is received by the IORP, the date of portfolio change will be the designated day. In all other cases the portfolio change is executed within 8 working days after receipt of declaration.
(e) A declaration of a fund member to change of investment portfolio to the Equalizer (HUF) investment portfolio is only possible on January 1st each year (in case of Equalizer (EUR) portfolio on January 1st each odd-numbered years).The IORP shall only accept such a Declaration Form if it is received by the IORP no later than December 15th of the previous calendar year.
In case the employee member takes part in a pension scheme, where the employer bounds the employer contributions to the payment of regular additional member contributions, the employee is obliged to pay these amounts with the same frequency as the employer contributions are paid (monthly, or quarterly). The employee can make a declaration to allow the employer to deduct this sum from his salary directly.
Above all this, the employee can perform regular, or occasional contributions anytime.
In case the member’s employment terminates, the member has no obligation to continue the payment of his member contribution, although, he still has the chance to pay regular, or occasional contributions anytime.
However, if at least 12 thousand HUF (1,000 HUF/month) is not paid in any calendar year after the accession, the IORP will deduct 500 HUF (or the equivalent amount in EUR) account maintenance fee at the closure of the calendar year. Contributions paid in EUR shall be converted into Hungarian Forints.
In one calendar year, contributions for a given member,
- regular employer contributions, and
- additional employee contributions,
are added up (called as total contribution) and the part defined in the OOR of the total sum is credited to the member’s account according to the following:
In case of HUF based pension schemes:
4% of total contributions up to 2,000 HUF in a calendar year and 96% of total contributions above 2,000 HUF – including both employee and regular employer contributions – shall be credited to the member’s account.
The remaining amounts are transferred to the IORP’s operation fund to ensure steady operation.
The 4,000 HUF entry fee is not included in the above mentioned 2,000 HUF.
In case of EUR based pension schemes:
4% of total contributions up to 7 EUR in a calendar year and 96% of total contributions above 7 EUR – including both employee and regular employer contributions – shall be credited to the member’s account.
The remaining amounts are transferred to the IORP’s operation fund to ensure steady operation.
The 4,000 HUF (or 13 EUR) entry fee is not included in the above mentioned 2,000 HUF (or 7 EUR).
In case of members ranked in the Equalizer portfolio, QUAESTOR Foglalkoztatói Nyugdíjszolgáltató Zrt. may provide a discount on costs charged to operating expenses (check Equalizer portfolio).
The membership terminates if:
- the member passes away;
- the employment terminates during the vesting period;
- the member switches to another IORP;
- the performance of occupational retirement benefits is accomplished.
In case of termination of employment, the member can decide whether to leave the accumulated pension savings and obtained rights at the IORP, or – in case the employer in the new employment is engaged with another occupational retirement service provider – switch to the IORP of the new employer.
In case the member does not make a declaration in thirty days after the termination of his employment, it is considered that his accumulated savings and obtained rights are to be left at the IORP.
Fees of special settlements with the members:
- 4,000 HUF entry fee (in case of EUR based pension scheme 13 EUR), which is deducted from the first regular employer contributions and additional member contributions arriving on the member’s account. This amount is credited to the operating reserve of the IORP.
- Fee for switch of IORP, one thousandth of the balance of the member’s account, but 4,000 HUF (or the equivalent amount in EUR) at most.
- Disbursement cost of lump sum benefit payments: 4,000 Huf (or the equivalent amount in EUR).
- Disbursement cost of monthly annuity payment: Cost of bank transfer/Postage cost.
- Cost of portfolio change: one thousandth of the member’s balance, but 4,000 HUF (or the equivalent amount in EUR) at most.
- In case at least 12 thousand HUF (1,000 HUF/month) is not paid in any calendar year after the accession, the IORP will deduct 500 HUF (or the equivalent amount in EUR) account maintenance fee at the closure of the calendar year.