1. Szebelédi Ferenc: Some challenges of the Hungarian pension system in the EU 
Sofia, February, 2005

2. 1. Structure of the Hungarian pension system
Usually in the EU
Hungary
Major relevant EU legislation
Pillar I.: Social security system (PAYG)
Pillar I: Social security system (PAYG)
1408/71 Reg.
(=883/2003. Reg)
„Coordination Regulation”
Pillar II: Mandatory pension funds „magánnyugdíjpénztár”
Pillar II. Occupational pension schemes -
1998/49 Dir
2003/41 „IORP” Dir
Pillar III. Individual pension schemes
Pillar III: Voluntary Individual pension schemes
„önkéntes nyugdíjpénztár”
1998/49 Dir

3. 2. Pillar I. issues
Traditional PAYG social security system
1408/71 Reg
Calculation rules (pro rata and theoretical benefits)
Coordination and clearing rules
→Little experience, seems not to have serious problems

4. 3. Pillar II: Mandatory pension funds
Under the scope of Reg. 1408/71 (which has PAYG logic)
Main challenges:
Theoretical benefits
→ funded systems are not able to manage theoretical benefits
2) Coordination among state competent institutions, clearing systems
→ pension funds are private insitutions: coordination mechanism and clearing system are not applicable

5. 4. Pillar III.: voluntary schemes
Voluntary individual pension funds
„Önkéntes nyugdíjpénztár”
Under of scope 1998/49 Dir
→Seems not to have major problems

6. 5. Occupational schemes: Challenges regarding the 2003/41 Dir. – 1.
41/2003. Dir is applied for occupational pension schemes
- Home state:
- rules for the activies of IORPs
- supervision
- Host state:
- make it possible to pay contribution to an IORP
- giving information about social and labour law
- limited supervision

7. 6. Occupational schemes: Challenges regarding the 2003/41 Dir - 2.
Hungary as Home state:
→ It seems, that Hungary has no occupational schemes, so there is no need to deal with regulation for IORPs

8. 7. Occupational schemes: Challenges regarding the 2003/41 Dir - 3.
Hungary as host state:
Have to make it possible for Hungarian undertakings to sponsor IORP
– possible tax problems
Have to determine Hungarian social and labour law relevant to occupational pension
– Hungary has no specific regulations
Investment rules, other options
– seems not to have any problem
Have to determine procedure for the notification process
– task of CEIOPS WGOP

9. Conclusions Pillar I. Little experience, no serious problems
Pillar II. No experience at all, major challenges:
- theoretical benefits
- coordination and clearing system among competent institutions
Pillar III: Seems not to have major problems
Occupational pensions: difficulties because of the lack of occupational pillar

10. Conclusions – 2.
→Mentioned challenges are not only the problems of Hungary
→EU regulations and directives do not cover all existing pensions schemes

11. Thank for your attention !