Hungarian State Treasury

The pension transfer procedure ensures that Hungarian officials or employees appointed to the institutions of the European Union can transfer back to the Hungarian Pension Insurance Fund the contributions they have accumulated in the EU institution's own pension scheme, and the transfer of pension rights acquired under the Hungarian pension scheme to the pension scheme of the EU institution and the establishment of pension rights corresponding to the contributions so transferred.

The pension transfer procedure is governed by Council Regulation (EEC, Euratom, ECSC) No 259/68 of 29 February 1968 laying down the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Communities, as amended several times (hereinafter: Staff Regulations).

The legal conditions of the procedure in Hungary are set out in Act CXII of 2012 on the Transfer and Remittance of Pension Insurance for Officials and Other Servants of the European Union and Amending Certain Acts on Pension Insurance and Other Related Acts (hereinafter: Transfer Act) and the implementing Government Decree 219/2012 (13 August).

Types of pension transfers:

• pension insurance transfer,
• pension insurance remittance.

A pension transfer procedure may be initiated by an official or servant of the Union who has been appointed to an EU organisation and by a dependant who is entitled to a benefit under the law of the EU official or servant.

The request for the transfer of pension contributions or the remittance of EU contributions must be submitted to the European Community pension scheme, in the form specified by the scheme, and not to the Hungarian pension insurance body.

The contact details of the Community pension administration body (hereinafter: PMO):

name: European Commission PMO.2.002 Pension Unit

address: 41 Avenue de Tervueren,

B-1049 Brussels, Belgium

The PMO forwards the EU official's request for pension transfer to the designated pension insurance body of the country where they acquired their period of service.

In Hungary, the pension transfer procedures are performed by the Government Office of the Capital City Budapest, in cooperation with the PMO and the applicant.

Upon receipt of the application, the Government Office of the Capital City Budapest shall invite the applicant to submit the form necessary for the procedure, setting a deadline of twenty-five days.

A decision will then be issued, in accordance with the application, determining the amount of Hungarian contributions and taxes that can be transferred or the Hungarian service period that can be recognised on the basis of remittance, and the earnings data that can be taken into account for the calculation of the future Hungarian pension.

The pension insurance transfer is a transfer of the amount of contributions and taxes deducted in Hungary to the pension scheme of EU officials and employees. If the EU official is a member of a private pension fund, the balance of the private pension fund individual account is also transferred. The amount transferred will be used to credit periods of insurance entitling to an old age pension under the EU pension scheme.

The transfer of pension insurance may be initiated by submitting a request to the PMO on the basis of the Staff Regulations, either at the time of appointment to the Union organisation or during the period of employment.

For further information on the possible cases of transfer of pension insurance and how to submit a request, please contact the EU body of appointment.

The pension insurance transfer payable to the Hungarian Pension Insurance Fund only relates to the Hungarian service period with recognised contributions based on the legal relationship with an insurance obligation and the payment of benefits subject to pension contribution liability. This may include, for example, service periods acquired through employment, private entrepreneur or business partner, the duration of the payment of rehabilitation annuity, rehabilitation benefit, unemployment benefits benefit, child care allowance, child care fee, child home care fee, nursing fee.

Those Hungarian service periods which are not based on compulsory contributions will remain in the Hungarian social security system as service periods entitling to a Hungarian old age pension. Such periods may include, for example, periods of study, compulsory military service, the first 30 days of unpaid leave before 1998.

If further Hungarian periods of service are acquired after the pension insurance transfer, the pension insurance transfer can be requested again.

The following persons are not entitled to a pension insurance transfer:

• an official or employee of the EU who has been entitled a Hungarian old age pension, an early retirement old age pension, benefits prior to retirement age, a service benefit for armed forces, a life annuity for dance artists or a transitional annuity for miners, or who has been granted a private pension fund service.
• a relative of an official or employee of the EU, if the official or employee has been established a Hungarian widow(er)'s pension, orphan's allowance, parental pension, work accident-related widow(er)'s pension, work accident-related orphan's allowance, work accident-related parental pension or who has been granted a private pension fund service.

After the pension insurance transfer, the Hungarian service period concerned by the transfer will be removed from the pension insurance register and its duration cannot be taken into account for the purposes of a subsequent Hungarian pension, but the EU pension scheme will recognise the service period entitling to pension and income corresponding to the amount transferred.

When determining the amount to be transferred, the first step is to determine the service period and the corresponding earnings and income for which the transfer can be made, in accordance with the provisions of Act LXXXI of 1997 on Social Security Pensions.

All earnings and income on which the contributions are based are counted as earnings and income, except that for the period before 1 January 2013, the maximum amount taken into account is the contribution ceiling.

The amount determined for each year is calculated by applying the revalorisation coefficients used to determine the pension benefits in the year of transfer.

If the applicant is a member of a private pension fund, the balance of their individual account with the private pension fund is also transferred when the pension insurance is paid.

The amount of the pension insurance transfer is determined and transferred in HUF.

The Government Office of the Capital City Budapest shall issue a decision determining the amount of the pension insurance transfer and the service period in Hungary covered by the pension contribution payment, which shall be notified to the applicant and the PMO.

The applicant must then confirm their intention to make the transfer when contacted by the EU institution. If the applicant withdraws their intention to transfer the pension insurance after the decision has been issued, the transfer will not be made.

The pension insurance transfer shall be made within 20 days of the decision becoming enforceable or, in the case of a transfer to a private pension fund, within 15 days of the transfer of the private pension fund to the Pension Insurance Fund.

The decision becomes enforceable when the PMO confirms the applicant's decision to transfer to the Government Office of the Capital City Budapest. The applicant, the PMO and, in the case of membership of a private pension fund, the private pension fund concerned shall be notified of the date of enforceability.

After the pension insurance remittance, the Hungarian pensionable service period and contributory earnings based on the amount transferred from the EU pension scheme to the Pension Insurance Fund will be credited to the pension insurance register.

Once contributions have been transferred back from the EU pension scheme to the Hungarian Pension Insurance Fund, the service period acquired under the EU scheme will be cancelled and therefore no pension can be established under the EU pension scheme in the future. On the basis of the amount transferred back, the service period and earnings entitling to a Hungarian pension will be recognised in the Hungarian pension insurance register.

As a general rule, the service period certified by the PMO should be entered in the pension insurance register as Hungarian service period.

The exception is if the EU official has also acquired service under the Hungarian social security pension scheme for the same day (hereafter: overlapping period), as the day can only be taken into account once.

In the case that the monthly amount of the offset income for a calendar year of the service period certified by the PMO is less than the amount of the statutory minimum wage in Hungary on 1 January of that year, only the pro rata part of the service period certified by the PMO may be recorded as Hungarian service period. In this case, the duration of the Hungarian service period will be less than the service period reported by the PMO.

The earnings and income due to the Pension Insurance Fund for the Hungarian service period to be credited are determined by the Government Office of the Capital City Budapest on the basis of the amount of the remittance notified by the PMO, taking into account the provisions of Annex 1 to the Transfer Act.

For the period prior to 1 January 2013, only the amount corresponding to the contribution ceiling may be taken into account as earnings or income forming the basis for contributions. In the case of overlapping periods before 1 January 2013, the contribution ceiling shall be reduced in proportion to the number of days affected by the overlapping.

If the EU official has made a pension insurance transfer before the pension insurance remittance, the income credited shall be determined as if the transfer had not taken place. In this case, the original Hungarian service period and the corresponding contribution base will be re-recorded.

If the amount of the pension insurance remitted is higher than the amount due to the Pension Insurance Fund, the remaining amount will be transferred according to the applicant's declaration:

• to an individual account in a voluntary mutual pension fund,
• to a pension service provider institution as a member's supplement, or
• to a pension savings account.

The declaration of the remaining amount must be made on the remittance form. If this has not been taken place, the Government Office of the Capital City Budapest will request the applicant to submit a statement within 90 days. If the applicant fails to declare within 90 days how the remaining amount will be used, it shall be paid to the Pension Insurance Fund.

The Government Office of the Capital City Budapest on the basis of the certificate issued by the PMO, will issue a decision on the Hungarian service period that can be recognised and the amount of earnings and income that can be taken into account per calendar year for the purpose of determining the future Hungarian pension. The decision is sent to the applicant and the PMO. In this case, the applicant must also confirm their intention to remit. If the applicant withdraws their intention to remit the pension insurance after the decision has been issued, the remittance will not be made.

If the remittance is paid, the Government Office of the Capital City Budapest will take steps to record the period of service and earnings data established in the decision in the pension insurance register and to transfer any remaining amount to the applicant's choice.