The Hungarian pension system in transition
After discussing the evolution of the policy dialogue in Hungary, this report broadly describes the reform of the pay-as-you-go public pension system and its partial privatization as legislated in July 1997. Through a combination of a debt and tax financed transition, the first partial pension privatization in Central Europe is shown to generate increased national savings while placing the pension systemon a more sustainable course. The potential positive impact on savings was diminished by politically-motivated compromises. Outstanding issues include problematic features of the"second pillar"and the reemergence of pay-as-you-go deficits in the long run. This suggests that further reforms, such as raising the retirement age beyond 62, will eventually be required.
|Date of creation:||30 Apr 1998|
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- Robert Holzmann, 1997.
"Pension Reform, Financial Market Development, and Economic Growth: Preliminary Evidence from Chile,"
IMF Staff Papers,
Palgrave Macmillan, vol. 44(2), pages 149-178, June.
- Robert Holzmann, 1996. "Pension Reform, Financial Market Development, and Economic Growth; Preliminary Evidence From Chile," IMF Working Papers 96/94, International Monetary Fund.
- Robert Holzmann, 1997. "Fiscal Alternatives of Moving from Unfunded to Funded Pensions," OECD Development Centre Working Papers 126, OECD Publishing.
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