In November 2010, György Matolcsy, minister of national economy, announced the nationalization” of savings that over three million people had invested in private pension funds. The measures were aimed at helping the country meet strict budget deficit targets set by the European Union.
He promised that the savings would simply be transferred to the state-run pension system. Each employee would retain the hitherto saved amount in an individual account. Moreover, in the event of the pensioner’s death, that money could be inherited.
Then Viktor Orbán named Gabriella Selmeczi commissioner in defense of pensions. She elaborated on the scheme. Any employee at any time will be able to ascertain the exact amount he has in his account and will be able to estimate the size of his pension at the time of retirement.
In February 2011 Viktor Orbán joined these two and promised that this new system of individual accounts will be ready to be implemented by the end of 2011. All these promises were necessary to entice more and more people to switch their accounts from private funds to the common state-run system.
These promises were most likely brazen lies. Apparently the government never had any intention of introducing a new system of individual accounts because the nationalized private pension funds never made it into the system. A part of that enormous amount of money (three trillion forints or $14.2 billion) was spent on current expenses while another part was lost in the stock market. So there was nothing to add to the individual accounts.
In January 2012 Gabriella Selmeczi admitted that “there is still a debate concerning different concepts but by the middle of the year a decision will be made.” Even in April, when the second Kálmán Széll Plan was released, the government promised “the introduction of individual accounts in the pension plan.”
The Kálmán Széll Plan 2.0 was supposed to prove to the European Commission that the Orbán government is planning to put its financial house in order. On the basis of its promises Ecofin, the council of EU finance ministers, approved the continuation of EU subsidies to Hungary, the so-called cohesion funds.
Now, Gabriella Selmeczi, who was supposed “to defend” the people’s pensions, no longer occupies the post of commissioner. In fact, the post no longer exists. She was appointed to oversee the transfer of stolen money into the bottomless pit of the Hungarian government’s budget. The money is gone and so is any kind of compensation.
Last Updated on Friday, 30 August 2013 09:11