Pension bonds will be launched shortly, and the minimum tie-up period will be ten years, Finance Minister Mihály Varga said in an interview given to mfor.hu.

He added that with the pension bonds they are hoping to offer people who wish to save up towards their pensions an attractive instrument which could compete – as regards the interest and yields it offers – even with the Hungarian Government Securities Plus. They are currently completing the finishing touches before the launch, and the offering will start this year. As the Hungarian Government Securities Plus constituted an important element of the first phase of the economy protection action plan last year, so could pension bonds play a part in the next action plan, he told the news portal.

Mr Varga said they are planning to offer the pension bonds to private individuals, not to institutions. They would like to introduce an arrangement which offers better terms and conditions to young buyers: the younger they are, the earlier they decide to buy bonds, the better the conditions will be. They seek to offer favourable yields and interest rates, and also sufficient flexibility which allows buyers to supplement their savings subject to their needs as at any time, he indicated.

He said the most important underlying idea is to encourage responsible action, and to extend the options of financial self-care. He added that as tax benefits will continue to remain attached to both the Early Pension Savings Account (NYESZ) and pension fund savings, he does not expect the pension bonds – similar to the Hungarian Government Securities Plus – to rearrange this area. Its role will be to supplement the current options, and to extend the possibilities of early financial self-care.

Regarding the term, the Finance Minister said it depends on the amount of time left from the start of the investment period to the investor’s pensionable age. The related consultations have not been concluded yet; for instance, as to whether – similar to pension fund savings – savings or a part thereof should be made available after 10 years or only upon the completion of the pensionable age. The minimum tie-up period will be 10 years.

They are currently negotiating about the green bonds also to be placed on the market this year on two markets, in Japan and China. There is greater interest in the former country where multiple market players have offered to act as partners in the offering. According to his information, they will be launched this year; by mid-year, they will have all information available, based on which they will be able to decide on the size of the green bond offering. They are considering terms of three to five years, and are planning to finance specifically climate protection-oriented projects from the proceeds.

Mr Varga also said that the Ministry of Finance will have talks about the reform of the local trade tax both with the opposition-led metropolitan municipality and the leaders of small settlements.

(MTI)