QUAESTOR defined contribution pension schemes are modern, unit-linked occupational pension schemes, in compliance with EU directives. They can be created within flexible terms and conditions and they function perfectly as motivation and retention tools as well.
Defined contribution pension schemes mean a special retirement provision where the calculated benefit amount is based on the paid employer and employee contributions of specified rate as well as on the accumulated yield deriving from the investment of these.
- Flexible accession terms
- Member accounts and contributions
- Crediting contributions on member accounts
- Performance of employer contributions
- A new motivation system, or the relationship of entitlement to the allowance and the employment
- Waiting period
- Basic Package, or Package constructed according to individual demands
- Performance of retirement benefits
- Death Benefit
- Optional investment (multi) portfolio system
Any company or organisation can join QUAESTOR Foglalkoztatói Nyugdíjszolgáltató Zrt. (also called as IORP) that signs the accession contract as specified in the Organizational and Operational Rules (OOR) of the company.
The employer has to set forth in the contract which group of employees they wish to create pension schemes for within the retirement provision (even one person can form a group).
The accession can be made by flexible terms and conditions, since the groups and unique pension schemes concerning these groups can be created arbitrarily within the OOR.
The IORP opens a member account for each employee who takes part in the retirement program of the employer. The member account is a kind of register on which the member’s receivables are based in the accumulating period and also the determination of retirement benefit when the member reaches the retirement age.
The employer sets forth the extent of regular employer contributions to the employees within the established pension schemes in the accession contract.
The employer can decide whether to make the employer contributions subject to regular employee contributions (matching contribution) or not. Member employees can perform additional regular or lump-sum payments any time.
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.
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.
A participant employer is obliged to pay all regular contributions determined in the accession contract for each employee joining the pension schemes.
In addition, a participant employer is also obliged to pay annual unified lump sum contributions – as an annual charge for the administration of each pension scheme – determined in the OOR. Creation of one pension scheme as a Basic Package (see parameters later) is free of charge of annual unified lump sum contributions.
The participant employer has the option to determine the time endurance for a vesting period for each pension scheme.
Vesting period is the shortest time the employee has to spend at the company to be entitled to the credited employer contributions and their yields.
This also means, that in case of termination of an employment contract because of any reasons during the vesting period, the employee shall not be entitled for the employer contributions, nor the yields of those, and such accumulated contributions and yields shall be credited in proportion to members' balances on the individual accounts of all other IORP members having fund memberships in the same pension scheme.
At QUAESTOR occupational pension schemes the vesting period can be 0, 1, 2, 3, 4, or 5 (statutory maximum) years.
The participant employer has the option to determine the time endurance for a waiting period for each pension scheme.
Waiting period is the time specified in the pension scheme, after which the member can get access to the occupational retirement provision the earliest – in case other conditions are met.
At QUAESTOR occupational pension schemes the waiting period can be 5, 6, 7, 8, 9, or 10 years.
When making the contract, the accessing employer can determine whether to create a pension scheme according to the rules of the Basic Package, or according to individual parameters.
- HUF based pension scheme,
- waiting period: 10 years,
- No determined vesting period (immediate vesting),
- Payments to member accounts are invested in the Consistent Portfolio, and no other portfolios can be selected,
- The accessing employer cannot bound the employer contributions to additional employee contributions,
- The form of retirement benefit: annuity payment.
In case the company decides to create an individual pension scheme, the following optional possibilities, or their arbitrary combination can be applied.
- Both EUR and HUF based pension schemes are allowed to be created,
- Specification of the waiting period (5,6,7,8,9,10 years),
- Introduction of vesting period (1,2,3,4,5 years),
- In case of the employee’s death during the vesting period, the accumulated regular employer contributions and their yields shall be credited to the individual member’s accounts of all other fund members having fund memberships in the same pension scheme,
- Investment into optional portfolios,
- Investment into the Consistent Portfolio upon the employer’s decision,
- Investment into the Equalizer Portfolio upon the employer’s decision,
- The accessing employer bounds the employer contributions to additional employee contributions (matching contribution),
- The form of retirement benefit is fixed (one lump-sum payment, or annuity),
- The form of retirement benefit can be chosen by the member (one lump-sum payment, or annuity).
The annual fee of the Basic Package (unified annual lump sum contribution) is 10,000 HUF/year/pension scheme.
In case of EUR based pension scheme the unified annual lump sum contribution shall be determined and paid in EUR.
The amount of annual unified contribution is 0 HUF in case of the first Basic Package.
In case the accessing employer decides to select any of the above-listed options the amount of annual unified lump sum contribution shall be modified according to the following:
|Waiting period: 9 years||+ 1,000 HUF|
|Waiting period: 8 years||+ 3,000 HUF|
|Waiting period: 7 years||+ 5,000 HUF|
|Waiting period: 6 years||+ 7,000 HUF|
|Waiting period: 5 years||+ 10,000 HUF|
|Vesting period: 1 years||+ 1,000 HUF|
|Vesting period: 2 years||+ 3,000 HUF|
|Vesting period: 3 years||+ 5,000 HUF|
|Vesting period: 4 years||+ 7,000 HUF|
|Vesting period: 5 years||+ 10,000 HUF|
|In case of the employee’s death during the vesting period, the accumulated regular employer contributions and their yields shall be credited to the individual member’s accounts of all other fund members having fund memberships in the same pension scheme, according to the current balances at the time of death.||+ 10,000 HUF|
|Availability of optional portfolios.||+ 10,000 HUF|
|Selection of investment portfolio upon the employer’s decision.||+ 10,000 HUF|
|The employer bounds the employer contributions to additional employee contributions.||+ 10,000 HUF|
|The form of retirement benefit is fixed in one lump-sum payment.||+ 10,000 HUF|
|The form of retirement benefit can be chosen by the member.||+ 10,000 HUF|
|Eur based pension scheme||+ 10,000 HUF|
In case of EUR based pension scheme the additional fees listed in the table above shall also be determined and paid in EUR.
- At the time of reaching retirement age, the fund member is entitled to receive retirement benefits in the form of one lump sum payment, or in fixed-term annuity benefit, depending on the classification of the pension scheme parameters, and considering the provisions on waiting and vesting periods. In case of requiring fixed-term annuity benefit the duration (term) of pension payments can be anywhere between 5 and 30 years. The annuity benefit can only be required if the amount of calculated monthly pension payment reaches 5,000 HUF (or the equivalent amount in EUR). Both forms of retirement benefits (one lump sum payment, fixed-term annuity) are charged with disbursement costs as defined in the OOR.
- In case of long-term disability (at least 50% disability level) the fund member is entitled to receive disability benefits either in the form of a lump sum benefit or a fixed term monthly pension after presenting the necessary documents as defined in the OOR, on the basis of the classified pension scheme parameters, regardless of the regulation on waiting periods. For the period and smallest amount of the annuity benefit the regulations of the paragraph above shall be applied.
In case of the employee’s death over the vesting period, the accumulated amount of the individual member’s account shall be paid to the beneficiaries or legal heirs. The form for beneficiary designation can be downloaded from our website.
The employer may choose the option to credit the accumulated regular employer contributions and their yields to the individual accounts of all other fund members having fund memberships in the same pension scheme in case of the employee’s death during the vesting period. In case the employer does not use this option, in case of the employee’s death during the vesting period the IORP will act in accordance with the foregoing.
QUAESTOR Foglalkoztatói Nyugdíjszolgálató Zrt. operates an optional investment (multi) portfolio system with eight available portfolios (4 HUF based and 4 EUR based portfolios), in which the employer can choose from the following options:
First, the employer may determine the currency parameter of the pension scheme (EUR or HUF), and then decide whether
the Consistent Portfolio is made fix for every employee member,
the Equalizer Portfolio is made fix for every employee member,
Offers the members the possibility to participate in an optional investment (multi) portfolio system.
The following portfolios are available for the members and the accessing employers:
- 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.