Huge Returns for Pension Funds

Both voluntary and private pension funds in Hungary ended 2023 with returns well above inflation.

According to calculations by the financial website enpenzem.hu, the vast majority of pension funds grew by 20% or more in 2023, making up for losses in 2022.

The National Bank of Hungary (MNB) expects annual average inflation to be around 17.6-17.7% in 2023. The vast majority of voluntary pension funds' portfolios and private pension funds achieved even higher returns.

The portal calculated that the majority of portfolios of voluntary savers achieved returns of around 20% or more, with some achieving annual returns of over 25%.

Private pension funds also outperformed voluntary funds. Only three of the 12 portfolios of the four funds still in operation had returns below 20%, while the others performed above. (Calculations are based on the December 28th exchange rate data.)

The specialist portal recalls that less than a year ago, savers in voluntary pension funds had to be reassured not to give in to the urge to touch their pension savings. Indeed, the fall in inflation in 2022 and the parallel rise in bond yields pushed yields into a nasty minus.