Arbeitspapier
The sustainability of the Hungarian pension system: A reassessment
This paper gives a reassessment of the sustainability of the reformed Hungarian pension system with a special focus on whether the introduction of the fully funded pillar in 1998 has led to any improvement in the sustainability of the pension system. After a brief description of the 1997/1998 reform of the Hungarian pension system, we present results from simulations with a revised pension model. Our results show that 1) the pension system, in its present form, is unsustainable with net implicit public liabilities in the system around 240% of GDP, unless corrective measures are taken. 2) The series of policy measures taken since the 1997/1998 reform account for nearly three-fourths of the net liability implicit in the pension system, reflecting a policy reversal: an alarming tendency of undoing the progress made by the reform in terms of improving the system's sustainability. 3) The funded pillar can help in lowering net implicit liabilities if the transition costs involved in the reform are financed by budgetary adjustment. 4) The returns recorded so far in the private pension funds fall short of expectations and, on the condition that these low returns persist, the second pillar is projected to provide annuities that do not make up for the reduction in benefits received from the public pillar. This conclusion is valid even if we compare a hypothetical sustainable full pay-as-you-go (payg) system with a sustainable multi-pillar system.
- Sprache
-
Englisch
- Erschienen in
-
Series: MNB Occasional Papers ; No. 40
- Klassifikation
-
Wirtschaft
Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors
Social Security and Public Pensions
- Thema
-
ageing
pension system
social security
fiscal sustainability
Rentenreform
Pensionskasse
Umlageverfahren
Ungarn
Alternde Bevölkerung
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Orbán, Gábor
Palotai, Dániel
- Ereignis
-
Veröffentlichung
- (wer)
-
Magyar Nemzeti Bank
- (wo)
-
Budapest
- (wann)
-
2005
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Orbán, Gábor
- Palotai, Dániel
- Magyar Nemzeti Bank
Entstanden
- 2005