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The Role of the Second and Third Pension Pillar in the Hungarian Pension System

Author

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  • Pandurics, Anett
  • Szalai, Péter

Abstract

The sustainability of pension systems is a highly topical issue across Europe, and increasing the role of supplementary occupational and voluntary pension schemes to complement the mandatory state pillar is on the agenda in almost every country. Following a brief introduction of the Hungarian pension system, our article analyses the historical development and the current role and state of retirement savings based on the most recent data available. Although all three pillars exist in Hungary, data reveal that the Hungarian pension system continues to rely far too heavily on the first pillar, the sustainability of which is surrounded by risks. Retirement plan products can only partially fulfil the ultimate role of providing significant and regular supplementary pension for future retirees. Old-age financial security can be improved substantially by systematically increasing the role of voluntary pension pillars and incentivising annuity products.

Suggested Citation

  • Pandurics, Anett & Szalai, Péter, 2017. "The Role of the Second and Third Pension Pillar in the Hungarian Pension System," Public Finance Quarterly, Corvinus University of Budapest, vol. 62(2), pages 212-231.
    • Handle: RePEc:pfq:journl:v:62:y:2017:i:2:p:212-231
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    File URL: https://unipub.lib.uni-corvinus.hu/8777/
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    Cited by:

    1. Balteș Nicolae & Jimon Ștefania Amalia, 2018. "Considerations Regarding the Pension Systems in Countries of Central and Eastern Europe," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 94-99, December.

    More about this item

    Keywords

    pension system; annuity; supplementary pension; tax allowance;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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