Pension Savings Account
Nyugdíjelőtakarékossági Számla, NYESZ
Voluntary insurance
- All individuals (natural persons) can open a pension savings account if they make an initial deposit of a minimum of HUF 5,000.
General finances
- Fully funded personal pension plans based on personal contribution payments and capital revenues.
Contribution payments
- Insured persons provide contribution payments and decide on the amount and frequency of payments individually.
State support & incentivising strategies
- The person may receive a personal income tax credit of 20% with regard to the annual payments to the pension savings account (maximum amount of the tax credit is HUF 100,000).
- However, a pensioner without any income belonging to the consolidated tax base (e.g. salary) will not be able to redeem the above amount on the deposited money.
- The investment returns of the funds which are then placed in the individual accounts are not subject to tax.
- The Ministry for Innovation and Technology (Innovációs és Technológiai Minisztérium) and the Central Bank of Hungary (Magyar Nemzeti Bank) supervises the investments and provides rules on information and transparency.
- Banks or investment funds manage pension savings accounts and pay benefits directly to the eligible person.
- To qualify for tax exemption, the payment of pension can start no earlier than the standard retirement age, provided that the ‘waiting period’ (set at 10 years) has passed.
Pension payments
- Accumulated capital through contribution payments and investment yields, minus administrative costs/fees of pension savings account provider.
- Lump sum payment, no possibility for annuity payments in several instalments.
Taxation and social security contributions on pension payments
- Pension payments are not subject to income tax and social security contributions after the eligible person has reached the standard retirement age of the social insurance pension scheme, provided that the ‘waiting period’ (10 years) has passed.
Voluntary insurance
- All individuals (natural persons) can open a pension savings account if they make an initial deposit of a minimum of HUF 5,000.
General finances
- Fully funded personal pension plans based on personal contribution payments and capital revenues.
Contribution payments
- Insured persons provide contribution payments and decide on the amount and frequency of payments individually.
State support & incentivising strategies
- The person may receive a personal income tax credit of 20% with regard to the annual payments to the pension savings account (maximum amount of the tax credit is HUF 100,000).
- However, a pensioner without any income belonging to the consolidated tax base (e.g. salary) will not be able to redeem the above amount on the deposited money.
- The investment returns of the funds which are then placed in the individual accounts are not subject to tax.
- The Ministry for Innovation and Technology (Innovációs és Technológiai Minisztérium) and the Central Bank of Hungary (Magyar Nemzeti Bank) supervises the investments and provides rules on information and transparency.
- Banks or investment funds manage pension savings accounts and pay benefits directly to the eligible person.
- To qualify for tax exemption, the payment of pension can start no earlier than the standard retirement age, provided that the ‘waiting period’ (set at 10 years) has passed.
Pension payments
- Accumulated capital through contribution payments and investment yields, minus administrative costs/fees of pension savings account provider.
- Lump sum payment, no possibility for annuity payments in several instalments.
Taxation and social security contributions on pension payments
- Pension payments are not subject to income tax and social security contributions after the eligible person has reached the standard retirement age of the social insurance pension scheme, provided that the ‘waiting period’ (10 years) has passed.
Legal Basis: Act CLVII of 2005 on the Pension Savings Account (2005. évi CLVI. törvény a nyugdíj-előtakarékossági számlákról).
Retirement (Life) Insurance
Nyugdíj (élet)biztosítás
Voluntary insurance
- Open to any individual with taxable income below the standard retirement age.
General finances
- Fully funded personal pension plans based on personal contribution payments and capital revenues.
Contribution payments
- Persons provide contribution payments and decide on the respective amount individually.
State support & incentivising strategies
- The fund members can get a tax refund of 20% of their contributions to a pension fund paid from their taxed income as reimbursement to their pension account (maximum amount of reimbursement: HUF 130,000 per year).
- Banks, insurance companies, or investment funds manage funds and pay benefits directly to the person.
- Based on the realisation of the given insured event – entitlement to retirement under the social insurance pension scheme.
- Other events can also result in payment of the accumulated capital, such as death of the insured person or upon health impairment of a degree of at least 40%.
Pension payments
- Accumulated capital through contribution payments and investment yields, minus administrative costs/fees of pension savings account provider.
- Life-long annuity paid monthly (using unisex-mortality tables); option for one-time lump sum payment; if the estimated amount of annuity benefits calculated for a period closing at the end of the 10th year reckoned from the date of the contract and payable for one month is less than HUF 5,000, the annuity benefits may be paid in the form of a single payment before the end of the 10th year from the time of conclusion of the contract.
Taxation and social security contributions on pension payments
- Pension (life) insurance payments are not subject to income tax and social security contributions after 10 years of membership and reaching the standard retirement age (or in case of a minimum of 40% of damage incurred to the eligible person’s health, i.e. a degree of disability of 40%).
Voluntary insurance
- Open to any individual with taxable income below the standard retirement age.
General finances
- Fully funded personal pension plans based on personal contribution payments and capital revenues.
Contribution payments
- Persons provide contribution payments and decide on the respective amount individually.
State support & incentivising strategies
- The fund members can get a tax refund of 20% of their contributions to a pension fund paid from their taxed income as reimbursement to their pension account (maximum amount of reimbursement: HUF 130,000 per year).
- Banks, insurance companies, or investment funds manage funds and pay benefits directly to the person.
- Based on the realisation of the given insured event – entitlement to retirement under the social insurance pension scheme.
- Other events can also result in payment of the accumulated capital, such as death of the insured person or upon health impairment of a degree of at least 40%.
Pension payments
- Accumulated capital through contribution payments and investment yields, minus administrative costs/fees of pension savings account provider.
- Life-long annuity paid monthly (using unisex-mortality tables); option for one-time lump sum payment; if the estimated amount of annuity benefits calculated for a period closing at the end of the 10th year reckoned from the date of the contract and payable for one month is less than HUF 5,000, the annuity benefits may be paid in the form of a single payment before the end of the 10th year from the time of conclusion of the contract.
Taxation and social security contributions on pension payments
- Pension (life) insurance payments are not subject to income tax and social security contributions after 10 years of membership and reaching the standard retirement age (or in case of a minimum of 40% of damage incurred to the eligible person’s health, i.e. a degree of disability of 40%).
Legal Basis: Act LXXXVIII of 2014 on the Business of Insurance (2014. évi LXXXVIII. törvény a biztosítási tevékenységről).